The government has reduced the profit rate in all types of savings at the beginning of the fiscal year 2021-27. The decision has been implemented since July 7. As a result, those who consider savings as a safe investment and monthly income source – especially retired elders, housewives, expatriate family members and middle class are under economic pressure.
Art Advisor and former Governor of Bangladesh Bank Dr. Salehuddin Ahmed said, “If the profit rate is high in the savings, people will leave the bank and invest in investing in savings.” This will create a liquidity crisis in the bank sector, which can destabilize the overall economy. '
He said, “There is sufficient deposit for the bank to manage the sustainable bank. Increasing investment in savings can reduce the dependence on the government's banking system. So the balance has to be balanced. '
Why is the profit rate reduced?
The Internal Resources Department of the Ministry of Finance has said that the profit rate of the savings is determined by taking into account the average interest rate on the government treasury bonds for five and two years. It is reviewed every six months. The latest review shows that the Treasury bond rate has dropped slightly. Accordingly, the national savings scheme has also reduced the profit rate.
According to the relevant circular, the previous profit rate will be upheld in case of the savings issued before July 1 this year. However, at the end of the term, the new profit rate will be applicable for the re -investment.
How much profit is?
In almost every scheme of the savings, the profit rate has decreased this time. For example, in the family savings, where the profit of less than 7 lakh is less than 7 lakh, the profit is 12.7 percent, now it has decreased by 5.7 percent. The investment rate of more than 7 lakh was reduced by 5.7 percent, which was earlier 12.7 percent.
Similar changes have been made in pensioner savings. Earlier, up to 12.5 percent profit, it has now dropped to a maximum of 5.7 percent. Bangladesh savings and profit -based savings at three months have also decreased by an average of 5.5 percent. The same trend has been shown as a post office savings bank.
Who is under pressure?
Economists and analysts say the decision to reduce the interest of the government may be financially logical, but its social impact is deep. There is a large population in the country – for whom the savings are the only reliable income sources. Among them are retired pensioners, housewives, expatriate family members, sick or unemployed people and middle class of cities and municipality.
Especially the reduction of interest rate on pension storage will have a direct impact on the lives of senior citizens. Many people depend on the monthly cost, medical expenses and the essential cost of the savings. This rate decrease means a kind of 'financial push' for them.
Triangle
The government has kept the tax -free income limit in the budget of the current fiscal year – Tk. This means that if it is more income, you have to pay taxes. However, in the ongoing inflation, the price of commodities in the market is unpaid. The addition of this is to reduce the profit of the savings. As a result, three pressure has been created on the middle class together – inflation, taxes and savings collapse.
Are limited income people benefit somewhat?
According to the new rules of savings, the investment below Tk 7.5 lakh has been made some more profit. The government has said that this is why limited income people should get some relief during this crisis. However, according to economists, if the limit was raised to 1 lakh, then larger population could have benefited.
IMF Conditions: The original driving force?
Experts believe that the main catalyst for the government's decision is the condition of the International Monetary Fund (IMF) loan agreement. One of the conditions of the IMF is that only one-fourth of the internal loan to meet the deficit budget should be collected from the savings. Besides, the company has also suggested to make the profit rate on the savings. That is, the interest rate on the savings will be determined by adjusting to the average rate of six months of the Treasury bill.
The government signed a $ 1 million loan agreement from the IMF. Since then, the sale of sales in each budget has been reduced. In the fiscal year 2022-27, where the target was Tk 1,000 crore, it has been reduced to Tk 12 thousand 5 crore in the fiscal year 2021-27.
Finance ministry officials say that the savings are part of social security, but in the eyes of the IMF it is a long -term responsibility for the government. Because, every year, the government has to pay huge interest interest.
What is the alternative system?
Central banks and economists say that reduce the profit of the savings can damage social security. In that case, the government should strengthen separate pension schemes, social allowances and grant -based assistance for older citizens.
Former finance secretary Mahbub Ahmed said, “A large part of the middle class depends on the profit of the savings. It would have been better for a healthy investment system to collect money from the bank rather than to meet the budget deficit with bank loans. '
Former Chief Economist of Bangladesh Bank MK Mujeri told the Bangla Tribune, “In the reality of inflation, lower and middle class families are breaking savings. But if the attraction of the savings is lost, these classes will be more at risk. '
Future Hint: Will review again
According to the finance department, the profit rate for the deposit will be re -reviewed at six months. Necessary changes may be reviewed by reviewing the Treasury Bond rate again next January. However, in the meantime the pressure on the affected class will be under pressure.
Social security vs. Social Security
Savings are not just economic investments – it is a pillar of social security. Reducing interest in this sector means the government's protection is shrinking. The government is following the contractional budget and monetary policy, just then the decision has been made to reduce the interest of the savings. On the one hand, even if the government liability is reduced, it can have a negative impact on people's confidence and storage on the side.
