Published : 20 May 2026, 02:54 PM
Updated : 21 Aug 2026, 03:45 PM
The government has been setting large borrowing targets from savings certificate sales to cover its budget deficit, but has fallen short in recent years.
On top of that, it has had to pay out more in interest and principal than it takes in from fresh sales.
Mirroring the trend of the past three years, the government received no net investment from the instrument during July through March.
Instead, the treasury had to pay out Tk 26.90 billion to certificate holders in interest and principal.
The then interim government had set a borrowing target of Tk 125 billion from savings certificates for 2025-2026 fiscal year.
Economists say high inflation has cut into real incomes, leaving people with little to save.
Lower interest rates and tighter restrictions have further pulled down investment in the instrument.
They also point to treasury bills and bonds as a growing draw for investors, adding to the slide in certificate sales.
For these reasons, they expect net savings certificate sales to finish FY26 in the red, as they did in each of FY23, FY24 and FY25.
The Department of National Savings on Monday released updated sales data showing gross sales from July through March fell short of payouts to holders, pushing net sales to a negative Tk 26.90 billion.
In FY25, the same nine-month period saw the deficit run even deeper, at Tk 86.91 billion.
That year, the government originally targeted Tk 154 billion from certificate sales, later cutting it to Tk 140 billion in the revised budget. It still ended the year in the red.
Net sales refer to what remains after interest and principal payments to existing holders are deducted from gross sales.
With savings certificate financing drying up, the government has leaned heavily on bank borrowing to plug its budget deficit across the past three fiscal years and into the current one, pushing bank debt steadily higher.
Net sales stood at Tk 199.16 billion in FY22, and Tk 419.60 billion the year before that.
Given the prolonged fall in investment, the borrowing target for FY26 has been trimmed to Tk 125 billion.
Former lead economist at the World Bank's Dhaka office, Zahid Hussain, cited high inflation and shrinking household savings as key reasons for the slump, alongside lower interest rates and tighter restrictions.
He told bdnews24.com, "For more than four years, the wage index has lagged behind inflation. People cannot make ends meet on what they earn.
“How would they save? What would they buy certificates with?
"There is another reason investment in savings certificates is falling. Investors are showing more interest in treasury bills and bonds because of better interest rates and other advantages. While an individual can invest a maximum of Tk 5 million in savings certificates, there is no such limit for bills and bonds.
"There is no tax on returns from bills and bonds. Even though savings certificates carry much longer tenures, a 91-day bill currently offers around 10 percent interest."
