Bangladesh Bank is striving to further lower interest rates in the upcoming year as part of the government’s strategy to gradually phase out savings certificates, or Sanchayapatra. Small investors who depend on savings certificates for financial stability are becoming extremely concerned about this shift, even as commercial banks see it favorably as a means of easing the government’s mounting debt load.

Economists are urging the government to develop alternative investment options to protect the financial well-being of the large segment of the population that depends on these instruments.

For many families struggling with high inflation, savings certificates have long been a reliable safety net. Some are now being forced to dip into their savings to cover rising living expenses. Many investors express concern, saying that despite the unstable state of banks, the government-backed nature of savings certificates makes them feel secure. If this option disappears, those without access to other investment avenues will face difficulties.

The government itself has relied heavily on savings certificates to cover budget deficits and fund development projects. By selling high-interest, long-term savings tools, it has both stimulated economic activity and offered financial support to a broad section of the population.

However, in a clear shift, the government has already started taking steps to discourage investment in savings certificates. Since June, and continuing through December, interest rates have been reduced—the maximum rate now stands at 11.98%, while the minimum is 9.72%.

Bangladesh Bank spokesperson Arif Hossain Khan stated that the government is actively working to redirect public interest from savings certificates towards treasury bonds and bills, which are considered more sustainable for managing public debt.

Banks also support this move, arguing that with inflation now in the single digits—around 7%, it’s reasonable to lower interest rates. Syed Abu Naser Bakhtiar Ahmed, Chairman of Agrani Bank PLC, said, “If rates are not reduced, the government won’t be able to repay its debt.”

At the same time, economists are warning that with investment slowing down, opportunities for employment and income generation are shrinking. They emphasize the urgent need to develop safe, alternative investment options for retirees and the elderly population.

Dr. Toufic Ahmad Choudhury, former Director General of BIBM, noted that people who depended on savings certificates should now be encouraged to explore other sources, as exclusive reliance on this one tool is not sustainable. He added that global organizations like the IMF and World Bank have also raised questions about the continued heavy use of savings certificates.

Last fiscal year, net sales of savings certificates turned negative, with the government paying out about Tk 6,063 crore more in interest and principal on previously sold certificates than it earned from new sales. This growing gap highlights the urgency of reforming the system and finding more efficient financing strategies.