Finance Minister AHM Mustafa Kamal has defended the government move to cut interest rate on savings certificates, saying that it won’t hurt the small investors.
Rather, it has been done in a bid to strike a balance between the interest rates on bank deposits and government savings tools.
Kamal was talking to reporters at an online news briefing after he attended a meeting of the Cabinet Committee on Government Purchase (CCGP).
The finance minister’s remarks came a day after Internal Resources Division (IRD) of finance ministry issued a circular on Tuesday, curtailing interest rates of five types of savings certificates for new of over Tk 15 lakh investment.
Usually, savings certificates target the marginalised people and also the pensioners, but in recent times the government has noticed that all are coming to these savings tools due to the comparatively higher interest rates, Kamal argued.
"If such a trend continues, then the other drivers of the economy will become stagnant," he remarked.
Apart from savings certificates, the IRD circular also said the interest rates of term-deposit will also decline, but general profit rates of Post Office Savings Bank will remain unchanged.
But under the new rules, those who have invested more than Tk 15 lakh in these savings certificates will get a profit at 10.3 percent. And if the investment is more than 30 lakh, the profit rate will be 9.3 percent.
Despite the cut, Kamal thinks that the interest rates of savings certificates are still higher than other deposits now prevail in market.
Asked whether the government wants to discourage people towards savings tools, Kamal said the government wants to motivate those sections of people to savings tools who actually require those.
Citing an example, he said that the government does not want anyone to invest Tk 1 crore in savings certificates, rather the investment could range between Taka 1 lakh to Taka 30 lakh and through this no one would be affected. The Finance Minister said the recent cut in interest rates has been made considering the rates of deposits in other banks, and also the interest of the marginal investors.
He, however, informed that rationalization of the interest rates of the savings certificates is an ongoing process and the rates might go up or go down.
In FY21, savings certificates worth Tk 1,121.88 billion sold, which was 67 percent higher than that of the previous fiscal year, while net sale rose 190 percent year-on-year to Tk 419.59 billion. Asked about the mushrooming of the e-commerce firms, Kamal said that such e-commerce firms often appear before the country and people and thus tend to cheat with the commoners. He said the concerned Ministries, Divisions, and agencies should take responsibility to deal with the issue.
Responding to another question on approval of the Cabinet Committee on Public Purchase for a solar power plant to a Panama-based company, the finance minister said he would inform the media about the details of the company later.
There are widespread allegations as many shell companies receive company registration from Panama to evade the taxes to legalize their investment of black money.