The New Nation - Internet Edition

Syful Islam

Commercial banks are allegedly discouraging the sale of savings certificates thus indirectly creating obstacles to the growth of government funds, informed sources said.

Violating the directives of the National Savings Directorate that issues the certificates the banks are asking the buyers about the source of fund that are to be used to buy the savings certificates.

Some banks are also discouraging potential buyers by asking them to invest in their different fixed deposit schemes, alluring them high profit rates, instead of buying the savings certificates. To discourage the buyers from taking saving certificates some banks have made the savings schemes available only to their account holders.

More than one third of the savings certificates are normally sold by the commercial banks followed by the branches of National Savings Bureau. So far the post office has maintained the top position among them who are selling the saving instrument.

Director of National Savings Saifuddin Ahmad Majumder said there is no instruction from his office to note the source of fund of the buyers of the certificates. The banks should not ask the buyers the sources of fund or create any obstacles, he said.

A high official of Bangladesh Bank said the creation of such obstacles to the sale of savings certificates or the creation of other funds is violation of central bank directives. This should be handled with utmost care, he said.

The Dilkusha corporate branch of Trust Bank Ltd has made the Know Your Client (KYC) form mandatory for the probable buyers of savings certificates. This has approval of neither the National Savings Directorate nor the Bangladesh Bank, sources said.

"Yes, it is mandatory for the savings certificates buyers. Recently I received a directive from the head office of the bank and I am following the order," said branch manager Monwar Hosen. The manager said that people were buying the savings instruments from his branch.

An official of the City Bank Motijheel branch said they sell savings certificates only to the existing account holders. "We do not sell certificates to people other than the account holders. This is rule of Bangladesh Bank," one Mr Rozario of the branch claimed.

Zakiullah Siddiquee, Principal Officer, Motijheel main branch of National Credit and Commerce Bank Ltd encouraged this correspondent to invest in their different deposit scheme instead of buying savings certificates.

"At present we have no form to sale savings certificates. It will be better for you to invest in our deposit schemes having interest rates ranging from 8 to 12 per cent," Siddiquee said.

One Mr Mamun of Motijheel branch of Mutual Trust Bank said, "We do not sale three-years savings certificates. We only sale five-years savings instruments depending on prior approval of the higher authority," he said.

The Director of the National Savings said the commercial banks have no right to create any such obstacles to the sale of savings certificates.

"They can't ask clients neither to fill up KYC form nor ask them to disclose sources of fund. They have no right to impose new rules on savings certificates," the director said admitting fall in the sale of the savings instruments in 2007 for various reasons.

Majumder said imposition of 10 per cent tax on more than Tk 1.5 lakh profits from savings certificates has hampered the growth of sale while tax-free investment in share market has deepened it.

"We will be taking actions against the banks which are creating obstacles to the sale of savings certificates if any client informs us in writing," he said.