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The government lowered the maximum investment ceilings of purchasing three types of savings certificates on Thursday.
The certificates are - Five-Year Bangladesh Sanchaypatra, Three-Month Profit-Based Sanchaypatra, and Paribar Sanchaypatra (family savings certificate).
Small investors can now purchase these savings certificates up to Tk 5.0 million in total in single name, and Tk 10 million in joint names, whereas the previous ceiling was Tk 10.50 million and Tk 12 million respectively.
The Internal Resources Division (IRD) under the Ministry of Finance also lowered the maximum purchase limit for three types of savings bonds to Tk 10 million in total.
The IRD also scrapped the provision of honouring expatriate and non-resident Bangladeshi investors with Commercially Important Person (CIP) status following their investment in the savings bonds, including Wage-Earners Development Bond, US Dollar Premium Bond, and US Dollar Investment Bond.
The IRD issued three separate gazettes to these effects on Thursday.
Officials said the new investment limits came into effect just after issuance of the notification on the day.
The maximum investment ceilings have been lowered on the basis of the government's previous decisions, they added.
Both policymakers and economists have suggested discouraging investment in savings certificates to ease the burden of costly borrowing tools and to help the banks lower their interest rates.
Earlier, an investor could buy Bangladesh Sanchayparta worth up to Tk 3.0 million, Three-Month Profit-Based Sanchaypatra up to Tk 3.0 million, and Paribar Sanchaypatra worth up to Tk 4.5 million in single name.
The investors were also allowed to purchase Bangladesh Sanchayparta worth up to Tk 6.0 million, and Three-Month Profit-Based Sanchaypatra up to Tk 6.0 million in joint names.
On the other hand, the National Savings Directorate (NSD) introduced Wage-Earners Development Bond in 1981, US Premium Dollar Bond in 2002, and US Dollar Investment Bond in 2002 for expatriate Bangladeshis.
The government used to honour the expatriate investors with CIP status for their investment worth Tk 80 million or above in 5-year Wage-Earners Development Bond, and $1.0 million each in US Premium Dollar Bond and US Dollar Investment Bond.
Talking to the FE, former finance adviser Dr A B Mirza Azizul Islam said the maximum investment ceilings could be brought down gradually to ease the burden of these costly borrowing tools on the government.
Sales of the savings certificates picked up in recent times, and so, the government may have reduced the ceilings.
He also alleged misuse of the government savings tools, as many people buy these in fake names.
There are some pressure groups, including the government's retired officials, who are against lowering the investment limits of these tools.
Dr Islam opined that the reduction in investment ceilings will not create any significant impact on banking sector.
The number of bank depositors has declined, as people are losing their capital due to lower interest rates and inflation, he added.
According to the NSD data, net sales of the national savings certificates stood at Tk 156.42 billion in the July-October period of the current fiscal year, 2020-21, against the government's target of Tk 200.00 billion for the entire fiscal.