The Financial Express

Post office savings: Govt moves to make NID mandatory

Finance Div launches pilot scheme tomorrow

JASIM UDDIN HAROON | Published: February 29, 2020 10:30:37 | Updated: March 03, 2020 14:07:41

Post office savings: Govt moves to make NID mandatory

The government is set to make use of national identity cards mandatory for the people willing to open accounts with Sanchaya Bank which belongs to Bangladesh Post Office.

The latest move is seen as a blow to the people who misuse the facility.

However, a steep drop in interest rates on post office savings has already attracted a great deal of public attention.

As part of the government move, the Finance Division under the Ministry of Finance will launch a pilot scheme at the GPO in the city tomorrow (Sunday).

The objective of such mandatory use of NIDs is to see whether the savings opportunity is abused by exceeding the investment limit or making 'benami' (fictitious) investments, people familiar with the development told the FE.

"Whereas there is no use of NID, there were huge abuses of it," one of them said.

He said total savings or investment in government securities/savings products will not exceed the limit set in the new guidelines for the department of savings.

Now, a person singly and jointly can invest to the tune of Tk 10 million in three savings schemes, according to Department of National Savings (DNS).

The schemes are: 5-year Bangladesh Sanchayapatra, 3-monthly profit-bearing Sanchayapatra and Poribar Sanchayapatra (Family Savings Certificate).

But a government retired employee can invest maximum Tk 5.0 million in pensioners' scheme.

Savings accounts in post offices saw soaring deposits in recent years thanks to high interest rates offered by the government to tempt people in urban and rural areas to use formal channels for parking their funds.

Deposits in ordinary accounts in post offices more than doubled to Tk 29.30 billion in the fiscal year 2018-19 from Tk 13.25 billion four years back, according to the data available from DNS.

A similar trend has been seen in cases of fixed deposit accounts in post offices.

In the fiscal year 2018-19, savers deposited Tk 139.50 billion in fixed deposit accounts in post offices, which was more than two and half times the deposits received in the fiscal year 2014-15.

As of the middle of February, the finance ministry offered as high as 11.28 per cent interest on a three-year fixed deposit account with post offices, which is higher than the interest rates offered by banks. And such profits are not even possible in risky equity market.

In case of ordinary accounts in post offices, the interest rate was 7.5 per cent, which is also higher than the rates offered by banks for savings accounts.

Dr. Mirza Azizul Islam, a former caretaker government adviser, told the FE that said the latest move would discourage savings.

Genuine savers now may invest in precious metals like gold, he said, adding that there is a little possibility of investing in the capital market by small savers as the market remained bearish.

Bangladesh post office provides savings banking facilities to the mass people along with its principal services.

It provides lucrative interest rate rather than the conventional banking. Currently, it provides 7.5 per cent simple interest rate for customer's savings bank account.

A customer can deposit a maximum amount of Tk 3.0 million in one name or singly and maximum Tk 6.0 million in joint name.


Share if you like