Net sales of National Savings Certificates (NSCs) dropped in July, the first month of the financial year 2025-26 due to prolonged inflation, shifting investor preferences, and changes in government borrowing priorities.
According to Bangladesh Bank data, net NSC sales was at Tk 1,293 crore in July, 2025 compared with that of Tk 2,187 crore in the same month in 2024.
However, unlike in previous fiscal years when net sales were negative, July posted a positive figure. This came as the government focused on repaying banks, leaving its net borrowing from the banking system at a negative Tk 2,516 crore in July 2025.
Negative sales occur when repayments on matured certificates exceed fresh investments, indicating that more savers are cashing in their certificates than buying new ones, bankers said.
For the past three years, that was the case, as many savers chose to encash their holdings rather than reinvest.
In FY24, net NSC sales hit a record negative Tk 21,124 crore, compared with negative Tk 3,295 crore in FY23 and negative Tk 6,063 crore in FY25.
Bankers said the trend highlighted how savers were increasingly cashing in certificates to meet expenses, while fewer were purchasing fresh ones.
For FY26, the government has set a borrowing target of Tk 1.04 lakh crore from banks.
In FY25, its net borrowing from the banking system fell to Tk 72,372 crore, down from Tk 94,282 crore a year earlier. But borrowing from commercial banks alone jumped to Tk 1,36,369 crore, tightening liquidity across the sector.
Experts said that high inflation has been the most damaging factor behind the three-year slump in NSC sales. For 35 consecutive months, inflation stayed above 9 per cent, eroding household incomes and leaving small savers with little capacity to reinvest.
In July 2025, general inflation eased slightly to 8.5 per cent but still remained high enough to strain family budgets.
At the same time, rising deposit rates in banks have attracted savers, offering more flexible options compared with the procedural restrictions of NSCs.
The government has gradually reduced its dependence on NSCs, largely because of their high interest cost.
Servicing NSC debt is more expensive than raising funds from banks or through treasury bonds, which led the government to prioritise repayments over new issuance.
In September 2021, the government reduced NSC interest rates by 1鈥�2 percentage points and introduced stricter compliance rules, including mandatory national ID and proof of tax return filings for purchases above Tk 5 lakh.
These measures discouraged some retail investors, particularly wealthier individuals who once used the instruments for large-scale investments under multiple names.
NSCs were a major tool for budget deficit financing, with net sales reaching Tk 19,915 crore in FY22, Tk 41,959 crore in FY21, Tk 14,428 crore in FY20, Tk 49,939 crore in FY19, and Tk 52,417 crore in FY17.
The current three-year negative streak marks a significant reversal from that trend.