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Govt probes institutional investors buying savings certificates

  • Published at 12:40 pm July 21st, 2017
  • Last updated at 12:44 pm July 21st, 2017
Govt probes institutional investors buying savings certificates
The government is investigating why a large number of institutional investors invested a huge amount of money in the savings instruments ignoring relevant law, officials say. The Department of National Savings has estimated that more than 40% investment in the sector was made by 16 institutional investors. A Finance Division official said that a committee was looking into the matter. Figures provided by the Department of National Savings show that sale of savings instruments in the first 11 months of 2016-17 fiscal were more than thrice the government's target for the entire year. Savings certificates worth Tk46,669 crore were sold in the July-May period against the full-year target of Tk19,610 crore. National savings officials said 16 institutional investors invested Tk190 crore and withdrew profits of Tk89 crore. The investors were stopped from withdrawing more funds, the officials added. Finance Minister AMA Muhith, however, said the government would not ask institutional investors to stay away from investing in savings instruments without creating investment opportunities elsewhere. In an informal briefing, Finance Division Senior Secretary Hedayetullah Al Mamoon said interest rates on some savings instruments might be kept attractive to ensure social security of pensioners and the middle- and low-income groups. Currently, there are four savings instruments and their interest rates varies from 11.04% to 11.76%. The Department of National Savings say institutional investors can invest in 13 categories but banks and financial institutions are not allowed to invest in the national savings instruments – only small agriculture firms are allowed to invest in the sector.