The net sales of national savings certificates increased in July-November period of the financial year 2024-25, as many depositors turned to such stable, low-risk investment.
Bangladesh Bank data showed that the net sales of NSCs hit Tk聽1,676 crore in July-November of 2024, marking a recovery from a negative balance of Tk聽3,858 crore in the same period of the previous year.
Bankers said that people now preferred investing in government treasury bills and bonds due to their high-interest rate earnings, with treasury bill interest rates soaring to a record 12 per cent.
Many are now opting for NSCs due to their relative safety compared to banks, they said.
Throughout FY24, NSC sales were generally negative, reflecting the impact of severe inflationary pressures on household budgets.
By the end of FY24, the net sales had reached a negative Tk聽21,124 crore compared with those of a negative Tk 3,295 crore in FY23.
This negative trend occurred as principal repayments outpaced new sales, draining funds from the government鈥檚 exchequer.
Bankers said that the negative trend reflected that people were relying on their savings amid acute and prolonged inflationary pressures.
The Bangladesh Bureau of Statistics reported overall inflation at 10.89 per cent in December, staying near 10 per cent since March 2023, leaving many without extra funds for investment.
Rising living costs, fuelled by an inflation rate hovering at 10 per cent since early 2023, left households with less surplus incomes to allocate long-term investments for household expenditures, they said.
The net NSC sales were Tk 8,332 crore in July-September period in 2024, which however dropped to Tk聽1,676 crore in July-November 2024.
Amid economic crises, the government had prioritised repayment over further borrowing through these high-interest instruments.
The total outstanding investment in NSC reached Tk聽3,47,945 crore in November, down from Tk聽3,63,534 crore in the same period of the previous year.
Bankers attributed the previous decline in NSC investments to a reduction in interest rates by 1-2 per cent on all savings certificates in September 2021.
The introduction of a maximum limit and the mandatory inclusion of national identification documents during the purchase of savings certificates had further exacerbated the decline, they said.
The Bangladesh Bank has also made it mandatory to submit proof of the previous year鈥檚 income tax returns for investments in procuring savings certificates worth more than Tk 5 lakh.
