People with savings certificates will most likely not profit from the Savings Certificate Policy 2017 if they are already benefiting from gratuity funds.
The Ministry of Finance had directed the Internal Resources Division to form a committee to reduce the abnormality that has arisen over Sanchaypatra Rules 1977 and Income Tax Law 1994. The seven-member committee, headed by the director general of the Department of National Savings, recommended that those who have gratuity fund deposits should not receive profits from savings certificates.
The committee found that five institutions including banks, financial institutions and an NGO has been depositing their gratuity funds in the Department of National Savings for five years to benefit from savings certificates.
Over the past five years, the five in questions have deposited Tk40.1 crore in earnings, and was set to earn Tk15.9 crore in profits. The committee recommended the latter profit be denied to the depositors.
Earlier, the government had announced plans to set up investment limits for potential buyers of national savings certificates, in addition to a two-tier profit rate. Buyers could also be required to disclose the sources of their funds to the Department of National Savings.
Finance Division officials said the government will not reduce the interest rate of savings certificates despite the finance minister’s repeated assertions.
An official said: “We need to change the profit rate on savings certificates.But the finance minister will have the last say.”
A source at the government’s policy-making level said decisions that may affect the government’s popularity are unlikely to be taken before the election.
The government is also planning to borrow massively from savings instruments.
Big investors, especially corporate houses, industrial entrepreneurs and business groups who have bought savings certificates in unusually large volumes are being identified for further business.
The interest rate on deposits is 3-4% in private banks and 4-5% in state banks, while the interest rates on savings certificates ranges from 10-11.25%.
In the 2016-17 financial year, the government had a target of selling Tk19,610 crore in savings certificates. But it ended up selling Tk52,327cr worth of certificates, a 167% increase from the previous fiscal year.