“In recent times, the government has noticed that everyone is turning to these savings tools because of the comparatively higher interest rates.”
AHM Finance Minister Mustafa Kamal said on Wednesday that the recent drop in interest rates on cash certificates would not affect marginalized small investors.
“With this drop in interest rates, marginalized people as well as those who keep small investments in savings certificates will not be affected,” he said.
The finance minister said this when responding to a question during his briefing after the meetings of the Cabinet Committee on Economic Affairs (CCEA) and the Cabinet Committee on Public Procurement (CCGP).
He said savings certificates typically target marginalized people and retirees, but in recent times the government has noticed that all are turning to these savings tools because of the comparatively higher interest rates. “If such a trend continues, then the other engines of the economy will stagnate,” he added.
Kamal said that although interest rates on savings certificates have been reduced, there has been no rate cut with investments of up to Tk 15 lakh given the marginalized section of the population.
Read also – The government cuts interest rates on cash certificates
“But, the interest rates of the certificates of deposit are always higher than those of the other deposits which prevail now on the market”,
The new rates will not affect the current investment and will only apply to new investments.
Under the new rules, which came into effect on Tuesday, the higher the amount of investment, the lower the returns. If the amount of the investment is more than Tk 15 lakh, investors will benefit from a lower interest rate, according to a circular from the Internal Resources Division (IRD) of the Ministry of Finance.
When asked if the government wanted to discourage people from using savings tools, Kamal said the government wanted to motivate those sections of people to use savings tools that actually need them.
Citing an example, he said that the government did not want anyone to invest a Tk1 crore in savings certificates, but instead the investment could go from Tk1 lakh to Tk30 lakh and no one would be affected.
The finance minister said the recent interest rate cut was made in light of the rates of deposits in other banks, as well as the interest of fringe investors.
He said, however, that streamlining interest rates on cash certificates is an ongoing process and rates could go up or down.
In the last fiscal year (FY21) savings certificates worth 112,188 Tk crore were sold, up 67% year-on-year.
Net sales of savings certificates amounted to Tk 41,959 crore and it grew 190% year-on-year, according to data from the National Savings Directorate.
The government has allocated Tk 62,000 crore for the current fiscal year to pay interest on national loans, compared to Tk 58,253 crore in the previous budget.
Asked about the proliferation of e-commerce companies, Kamal said that these e-commerce companies often appear in front of the country and the people and therefore tend to cheat with the common people.
He said the relevant ministries, divisions and agencies should take responsibility for dealing with the problem.
Also Read – Sales of cash certificates tripled due to low bank deposit rates
Responding to another question on the government’s progress towards the decentralization process, Kamal said the government wants people to stay where they stay, especially in rural areas to reduce pressure on the capital.
For this, he said, it is necessary to multiply the rural infrastructure and civic equipment for which the government has worked tirelessly.