Staff Correspondent:

Most people deposit bulk portion of money in banks and then invest in savings certificates for higher profits. But despite the high interest rates, people have reduced the purchase of savings certificates and the tendency to redeem savings certificates also has increased.
This has resulted in net sales becoming investment negative. In the first six months of the current 2024-25 fiscal, net sales have hit Tk 2,244 crore negative.
Although the positive trend in investment of savings certificates returned at the beginning of 2024-25, investment by people in savings certificates has been declining since October.
During this time, the tendency to redeem savings certificates instead of selling them has also increased. Overall, the number of redemptions was higher than the purchase of savings certificates during this period.
Meanwhile, the government has set a target of taking a net loan of Tk 15,400 crore from the sale of savings certificates in the current fiscal year. The net sale (investment) of savings certificates is considered as the government’s loan, which is used to finance the budget deficit.
Economists and bankers said there are several reasons behind the decline in savings certificate sales and the increase in redemption. They said people’s expenses have increased due to high inflation.

Income is not increasing at that rate. That is why many are being forced to cancel savings certificates. Again, many banks are unable to pay back their customers. Many customers are canceling savings certificates due to lack of trust.
On the other hand, many are not interested in keeping money in savings certificates after the change of government, as hundreds of bank accounts have been frozen and suspended.
Dr Khondaker Golam Moazzem, research director of Center for Policy Dialogue (CPD), said, “The first reason for cancellation of savings certificates is high inflation. Expenses are increasing at twice the rate while wages are not increasing.
In addition, there is lack of customer trust in many banks. Banks are unable to pay customers. The rate of cancellation of savings certificates is also increasing due to the lack of trust in overall banking sector.
Industry stakeholders say due to high inflation, people are running their families by breaking their savings. Moreover, the saving propensity of lower and middle class has also decreased.
As a result, a large part of institutional and individual investment has shifted to banks bills and bonds. Due to these reasons, the net investment in savings certificates has decreased. However, the increase in saving interest rates from January is expected to increase the sale of savings certificates.
The latest report of Bangladesh Bank says in the first six months (July-December) of the current 2024-25, a total of Tk 30,109 crore saving certificates were sold. On the other hand, redemption of savings certificates was Tk 32,354 crore.

As a result, net investment in the first six months of the fiscal current fiscal year was negative by about Tk 2,244 crore. Due to the low redemption trend in the first three months net investment was however in the positive.
However, the trend of redemption of savings certificates increased in next three consecutive months, causing net investment to become negative.