Investment ceiling in savings bonds lowered for NRBs

The government has lowered the maximum investment limit in national savings bonds for non-resident Bangladeshis (NRBs).

Besides, the provision of honouring NRB investors with commercially important person (CIP) status following their investment in these bonds has been scrapped.

Earlier, NRBs could invest a maximum of Tk50 lakh separately in three savings bonds – Wage-Earners Development Bond, US Dollar Premium Bond, and US Dollar Investment Bond.

According to the new guidelines, a maximum of Tk1 crore or its equivalent in foreign currency can be invested in these three bonds together, according to a circular of the Bangladesh Bank.

Former governor Dr Salehuddin Ahmed told The Business Standard, "The pace of implementation of government development projects is slow due to the Covid-19 pandemic. The amount of loans taken by the government from the banking system is also much lower compared to last year.

On the other hand, foreign exchange reserves are in a strong position due to high inflows of remittances."

The government now has a lot of money in its hands, he said, adding that spending pressure is also low. "This might be the reason why investment from NRBs has been discouraged."

This is because the government has to pay high interests against investments in these bonds like in the case of savings certificates.

He also opined that the previous benefits for NRBs may be reinstated once the economy turns around at the end of the pandemic and the government needs money.

Previously, a non-resident Bangladesh would get CIP status if they invested Tk8 crore in the Wage Earners Development Bond and $1 million each in US Dollar Premium Bond and US Dollar Investment Bond.

From now on, this status will not be given anymore, according to the circular issued by the central bank. The policy regarding the selection process of such investors as CIPs also has been scrapped.

People who get the CIP status by investing in bonds get seven types of privileges, including entry card to the Secretariat and car sticker for one year, priority in getting government services for themselves and their family members, invitation to national functions, reservation of seats for travel by road, sea and air, and use of the VIP lounge at airports.

Meanwhile, the central bank has also issued a circular regarding the maximum ceilings of purchasing three types of savings certificates – 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 Tk50 lakh in total in single name, and Tk1 crore in joint names.

Even though this investment limit has been in effect since 3 December this year, it has been officially announced through this circular.

Earlier, a maximum of Tk30 lakh could be invested in a 5-year Bangladesh Sanchaypatra in one name and Tk60 lakh in joint names, Tk30 lakh in three-month Profit-Based Sanchaypatra in single name and Tk60 lakh in joint names, and a maximum of Tk45 lakh in Paribar Sanchaypatra (family savings certificate).

The government has a target to sell Tk20,000 crore worth of savings certificates in the current financial year, and over Tk15,000 crore has already been sold in the first four months (July-October). During the corresponding period of last year, Tk5,500 crore worth of savings certificates were sold.