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The latest hike of rate of return on state-run savings instruments has helped the resource-hungry government mobilise an increased volume of funds through non-banking domestic borrowings.
Official figures showed the government's net borrowing through sales of saving certificates marked a 15 per cent rise during the first seven months of the current fiscal over the corresponding period of last fiscal.
The government borrowed a net amount of Tk 15.27 billion during the July-January period of the 2005-06 fiscal compared to Tk 12.22 billion during the same period of last fiscal.
"Such a substantial rise in the borrowing was mainly because of the recent enhancement of the rate of return on savings instruments by the government," an official source said.
The government raised the rates of return on different types of savings instruments by around 1.50 per cent in early December 2005 in a bid to mobilise more funds through non-banking domestic borrowing.
Besides, the raising of maxi-mum investment ceiling also made a greater room for the institutional investors to pump their money into the savings schemes, officials said.
"The hike of rate of return and enhancement of maximum investment ceilings together pushed up the overall sales of savings instruments in the recent months," said the official.
Previously, the net sales of savings certificates earlier witnessed a negative trend due to the withdrawal of increased volume of investments through the domestic public borrowing system because of lower rates of return on the same, along with provisions of maximum investment ceilings.
Considering the satiation, the government recently raised the ceiling from Tk 5.0 million to Tk 10 million for institutional investors while the limit has been increased from Tk 2.5 million to Tk 5.0 million for individuals.
After registering a negative trend, the net sales of savings certificates stood at Tk 900 million in last December while the amount jumped to Tk 7.25 billion in January this year, figures showed.
According to official figures, the sales of various savings instruments amounted to Tk 76.37 billion during the first seven months of the current fiscal while the related figure was Tk 56.40 billion for the corresponding period of the 2004-05 fiscal.
Citing an example, an official said the sales of the 'Five Years Bangladesh Sanchayapatra' increased to Tk 12.17 billion during the July-January period of this fiscal from Tk 4.51 billion in the same period of last fiscal.
Officials at the National Savings Directorate (NSD), however, predicted a further rise in the sales of savings certificates in the months ahead.
Meanwhile, the volume of interest payments by the government on its various kinds of savings certificates increased by nearly 20 per cent to Taka 25.90 billion during the July-January over the corresponding period of last fiscal.
Such an increase was mainly because of a huge withdrawal of fund by investors from the domestic non-banking borrowing system in the past few months, official sources pointed out.
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