** People rescuing an injured passenger from inside a passenger bus hit by a truck on Dhaka-Mawa Expressway in Shologhar area of Shreenagar upazila in Munshiganj on Thursday. ** Motorcycles allowed on Padma Bridge after 10 months ** Commuters charge extra fare, passengers disappointed ** 78 people killed in Yemen stampede ** Moon sighting committee meets today to ascertain Eid day ** 9 killed in road accidents in 3 districts ** US announces new $325 m military aid package for Ukraine ** Eid-ul-Fitr in Saudi Arabia today ** Eid exodus begins ** LPG price cut illusive ** 15 hurt as bus overturns in capital ** New interbank cheque clearing timings set for Eid holidays ** Four women hit by a train die in Tangail ** 12.28 lakh SIM users left Dhaka on Tuesday ** Sylhet engineer threatened over power outage ** People rush to village homes to spend Eid holidays with their near and dear ones. This photo was taken from Sadarghat Launch Terminal on Tuesday. NN photo ** Surge in cases of dehydration, diarrhoea amid summer heat wave ** Padma Bridge construction cost increases by Tk 2,412cr ** PM gives Tk 90m to Bangabazar fire victims ** Textile workers block highway demanding wage, Eid bonus ** Attack on PM's motorcade Ex-BNP MP, 3 others get life term ** Load-shedding increases for demand of electricity during heat wave ** Motorbikes to be allowed on Padma bridge from Thursday ** 5-day Eid vacation begins from today ** Take Nangalkot train accident as a warning about negligence of govt functionaries **

Savings certificate funds up

28 June 2014

bdnews24.com :
A sharp rise in the sale of savings certificates has helped the government reduce its dependence on bank borrowings to meet the budget deficit.
Experts, however, say the increased sale of savings instruments will only raise the government's loan burden unless the money is invested in productive sectors.
The government's net borrowing through sale of savings certificates was more than Tk 100.18 billion in the first 11 months of the current fiscal year that began on July 1 last year.
The figure is 12.39 times higher than the net borrowing of Tk 7.48 billion in the same July-May period of the previous FY and 1.5 times more than the budgetary target.
It constitutes 20 percent of the last FY's budget deficit.
Economist Zaid Bakht, Research Director at the Bangladesh Institute of Development Studies, thinks government borrowing through savings certificates in the full 2013-14 year will surpass the previous annual records.
The government borrowed a record Tk 115.9 billion in the 2009-10 FY.
Bakht told bdnews24.com: "People have bought a greater number of savings instruments all through the (current) FY due to the long sluggishness in the share market and low interest on bank deposits."
He said transaction of savings certificates increased further following the finance minister's announcement in the June 5 budget speech that pensioner savings instruments up to 0.5 million would be tax-free.
According to the latest central bank data, the government sold savings certificates worth Tk 216.56 billion in the July-May period this FY and paid back Tk 116.38 billion as interest and principal in the same period, meaning the net borrowing stood at Tk 100.28 billion.
The government had set a target, in the budget, to borrow Tk 49.71 billion through savings certificates in the current FY, but it was later raised to Tk 80 billion.
For the upcoming 2014-15 FY, the government has fixed a target of Tk 90.56 billion to borrow from the sector.
Economist Bakht said the money borrowed through the savings certificates would merely compound the loan burden unless the government used the money in productive sectors.
He said: "The interest rates on savings certificates are higher with some close to 13 percent... Naturally the government's loan burden will increase.
"But if the money borrowed through savings certificates is invested in productive sectors, investment will increase, having a positive impact on the economy.

Add Rate