The government is in the process of consolidating transactions of three government bonds for expatriates under the National Savings Scheme’s online management system. If launched, it will force expats to use their National Identity Card (NID) to invest in savings plans.
The Bangladesh Bank will launch the system on Tuesday, people familiar with the matter told The Business Standard (TBS).
This decision will ensure the transparency of bond investments and allow the government to easily track how much money is being invested by whom and where.
Previously, National Savings Certificates (CSN) were integrated into the online database.
There are three bond savings programs for expatriates – the employee development bond, the US dollar premium bond and the US dollar investment bond, according to the Bangladesh Bank and ministry officials. finances.
Of the three bonds, expatriates can invest in employee bonds on their own behalf, as well as on behalf of their family members living in Bangladesh. For the other two, expatriates can only invest in foreign currency in their name.
All bonds allow an expat to invest a maximum of Tk1 crore – individually or collectively. The limit is applicable even in the case of collective investment in savings certificates and bonds.
Bonds can be bought and redeemed at any of the Bangladesh Bank’s offices, foreign branches, exchange bureaus, foreign exchange houses and authorized local dealers (branches of banks that deal in foreign currencies).
Currently, the government does not have a central database containing information on the investments made through these bonds. This means that there is no way of knowing how much money one is investing using the bonds of a single system. The announced decision will remove this bottleneck by ensuring the transparency of bond investments.
Speaking on the matter, the director of the National Directorate of Savings (Policy, Audit and Law) Md Shah Alam said that the transaction activities of the Bangladesh Savings Certificate, Savings Certificates based on 3 month profits and family savings certificates have already been managed online. These bonds are now subject to the same system, with expatriates having the option of investing in both cash certificates and bonds.
He said it will be easier to know if an expat is investing beyond the consolidated investment limit. . Now it will be easier to know if someone is investing beyond the consolidated investment limit. “
He said expats will need a NID to buy the bonds. Steps are being taken so that any expatriate who does not have the document can collect it from the embassies of their respective countries.
Investment in employee development bonds starts from Tk 25,000 with a maximum limit of Tk 1 crore. The five-year bond offers a maximum interest rate of 12% at maturity for investments up to Tk 15 lakh; 11% for above Tk15 lakh to Tk30 lakh; 10% for above Tk30 lakh to Tk50 lakh; and 9% for more than Tk50 lakh to Tk1 crore.
The bond, launched in 1981, can be purchased by a legal employee (expatriate) or their agent living in Bangladesh using local or foreign currency. Civil servants working in Bangladesh missions abroad can also invest in the bond.
Meanwhile, expats can also invest in the US Dollar Premium Bond from a minimum of $ 500 to a maximum of $ 50,000. Non-resident Bangladeshis or nationals born in Bangladesh can purchase the bond with a three-year maturity. It offers 7.5% interest at the end of the term, with 6.50% and 7% interest at the end of the first and second year, respectively.
The US Dollar Investment Bond is also available at the same price and can be purchased by non-resident Bangladeshis and Bangladeshi-born nationals using US dollars. The three-year bond offers 6.5% interest at the end of the term.
Both US dollar bonds were launched in 2002. An investor in these bonds is offered a death risk benefit of 15-25%, with interest paid every six months.
The money invested in these three bonds and the profits made are tax exempt. These bonds also have loan facilities against them. In addition, they offer the possibility of investing over several periods.
According to data from the Bangladesh Bank, the total investment in three types of expatriate bonds until last June was Tk 14,838 crore. Most of this investment is made up of five-year employee development bonds with 12% interest. Until last June, the amount invested in this bond was Tk 12,365 crore, which represents 83.33% of the total investment.