The government borrowing from savings certificates has been exceeding its target for the last few years.
The saving-schemes offered by the Directorate of National Savings (DNS) originally aimed at fixed-income group and pensioners. But analysts believe the high-income group accounts for nearly for 90 percent of the buyers.
“In reality, high-level government officials, high-income group and politicians accounts for 90 percent,” Ahsan H Mansur of the Policy Research Institute told Bangla Tribune.
According to the executive director of the private think-tank, 85 percent of the saving certificates are being held by 12 percent of the buyers, while the rest 88 percent buyers have the 15 percent.
Bangladesh Bank says that the high-interest rate has led some banks and financial institutions to invest in the government-offered schemes.
The DNS, however, says they have no database on the buyers. “We have no information on buyers. Any Bangladeshi citizen, over 18 years old, is eligible to buy saving certificates.”
A volatile capital market and fall in banking interest have encouraged people to invest in the savings certificates. Moreover, no questions are asked over the source of the funds.
The government borrowing from savings certificates has been hitting records in the past few years.
According to DNS figures, savings certificates worth over Tk 800 billion were sold in the just concluded 2017-18 fiscal.
The interest on five-year family savings certificates on maturity is 11.52%. The rate is 11.76% for five-year pensioner savings certificates, 11.28% for five-year Bangladesh savings certificates, 11.04% for three-year savings certificates paying quarterly profits and 11.28% on three-year post office savings certificates.