Tradable savings instruments

The idea of making government’s savings instruments tradable is quite interesting. Its practical benefits are likely to be wide, adding a new dimension to private savings and even the country's economy. Right now the money invested in savings tools has little opportunity to roll and speed up the process of 'money begets money' other than contributing to government fund for its expenditure. If the savings instruments like sanchaypatras of different categories become tradable in the secondary market, their dynamic provisions may have a multiplier effect on the bourse, private savings and the economy in general. Already popular, sanchaypatras will be more attractive because of the flexibility and dynamism the Finance Division's initiative will add to those instruments. People will be able to sell those in time of emergency and once the exigency is met, they can buy instruments similar to the ones they sold instead of going the whole hog of opening a fresh savings tool with the bank.

Another feature of immense merit with highly practical use will be its collateral value. Currently, fixed deposit receipt (FDR) enjoys the mortgage value and can be used as collateral for obtaining loan but sanchaypatras do not enjoy the same status. This is plainly contradictory. FDR is savings for a certain period and the agreement is made between an account holder and the bank concerned. If the bank collapses, there is no guarantee that the depositors will get their money back. In case of sanchaypatra, the government or the state is the guarantor of the investment and the money with interests has to be paid back unfailingly. So, the use of savings instruments as collateral is more than justified. How much loan against those can be sanctioned is a matter that can be meticulously worked out. Understandably, the nitty-gritty will be specified in clear terms to avoid confusion and loan default.

In this context, a perusal of the total amount of the savings certificates sold in 2024 and the repaid amount present a clear picture of depositors' financial constraints. By issuing savings certificates, the country's banking channel had an infusion of Tk788.47 billion while the repaid amount stood at Tk999.72 billion, registering a decline in sale by Tk211.24 billion. The reason is not far to seek. Inflation and ill health of the economy compelled more people to encash their savings instruments in order to stay afloat. Many of the savings account holders did so prematurely. Had there been the opportunity to sell savings tools in the secondary market or receive loans against those, many of them would not have encashed their sanchaypatras.

Sure enough, trading of government's savings instruments in the secondary market is a smart way of mobilising government fund. More importantly, the dynamism it will lend to money is likely to make idle money's use productive. Small entrepreneurs can make the best use of this limited but highly useful fund if the commercial aspect can be made compatible with investment in their small and medium enterprises (SMEs). Mobilisation of fund alone without its productive use and circulation in manufacturing units, businesses and market does not make an economy dynamic and strong. The range and scope of government's treasury bills and bonds in expediting such economic activities at the grassroots level can as well be widened to complement such an effort.