The sale of savings bonds has fallen to touch Tk 8.22 billion this October. In the same period last year, this was Tk 44.16 billion.
A Bangladesh Bank report says that compared to October, 2018, this year during the same period the sale of savings bonds has fallen by Tk 35.94 billion. Analysts feel that the decline indicates an economic slump.
The executive director of South Asian Network on Economic Modeling (SANEM) Professor Selim Raihan, said: “The gradual fall of sales in savings bonds is an indicator of economic stagnation.”
Several strict rules have been issued on buying savings bonds, discouraging even some interested potential buyers, he added. Due to restrictions on savings bond, the banking sector is not seeing any improvement either.
'There is a feeling that if restrictions are imposed on savings bonds, the deposits of banks would rise and businessmen would be able to take loans on low interest but this did not happen, he commented.
Describing the loan growth the worst in the last ten years, Professor Selim Raihan said: “Defaults on loans have also risen.”
But a researcher of Bangladesh Institute for Development Studies (BIDS) and chairman of Agrani Bank, Dr Zayed Bakht, said: “Due to the introduction of some strict rules, the investment of black money plus the dubious practice of investments through fictitious names has stopped. Since TIN and bank account are mandatory, many cannot invest in savings bonds.”
In the first four months of 2019-20 fiscal year, the net sales of savings bonds were worth Tk 55.12 billion as against Tk 178.28 billion in 2018-19.
The government was advised to borrow less against bonds and in the current year, the source tax on bonds for more than Tk 500,000, was raised to ten percent.
For buying bonds worth more than Tk 100,000, TIN and bank account have been made obligatory. Steps have been taken to stop people buying bonds from different places. The ceiling for single buyers is Tk 6 million. To prevent corrupt people from buying bonds, a database has been made and therefore, the urge to buy bonds has dwindled.
There are four types of bonds: five year family bond, five year pension bond, five year profit based and three year profit based every three months.