Rich to be barred from buying savings tools

The government is going to connect the national savings certificate (NSC) buyers' database with that used in the creation of national identity (NID) cards to prevent the certificates from going into the hands of ineligible people.

The NSCs come in a range of durations and types, offering the assured return of at least 9 percent in interest per annum.

The limit on total investment is also quite generous for each, making those quite a popular choice for investment among fixed income people, especially since private banks offer lesser returns in interest.

But there are some malpractices in the administration of the NSCs, allowing oversubscription and ineligible people to take advantage of the schemes.

So the main objective of assisting fixed income people remains unachieved while the government bears a huge burden of providing interest against the NSCs.

"Steps have been taken already," said Finance Minister AMA Muhith, adding that it would be possible to bring more discipline in the management of NSCs.

"It would be a very good initiative if the government implements this properly," said Md Moniruzzamn, managing director of IDLC Investments.

When rich people are unable to buy NSCs, their money will be diverted towards the banking sector or capital market, which would be good for the financial sector, he said.

Muhith in his budget proposal last year had stated that steps would be taken to reshape the owning system of NSCs so that the rich can not take advantage of those. No such step was taken afterwards.