Written by The Banking Post
Investment in National Savings Certificates (NSCs) remains under pressure, with net sales continuing in deficit despite a gradual slowdown in withdrawals.
Data show that net sales recorded a deficit of Tk 11.65 billion in February 2026, improving from a deeper shortfall of Tk 18.51 billion in January. The pattern mirrors last year, when February also posted a deficit, pointing to a sustained decline rather than a short-term fluctuation.
For the first eight months of FY26 (July–February), the overall deficit has narrowed sharply to Tk 5.55 billion, compared with Tk 87.71 billion in the same period a year earlier. While this suggests stabilisation, the market has yet to return to positive growth.
The outstanding stock of NSCs, however, has edged up to Tk 3.42 trillion as of February 2026, from about Tk 3.37 trillion a year earlier, reflecting accumulation despite continued net withdrawals.
On an annual basis, the deficit has also eased significantly—falling to Tk 60.63 billion in FY25 from Tk 211.24 billion in FY24—indicating a gradual moderation in outflows.
Market analysts attribute the persistent weakness to policy changes and shifting financial conditions. Stricter compliance under the National Savings Certificates Online Management System has limited participation from large investors, while higher interest rates in the banking sector have made deposits more attractive.
Rising inflation has further eroded real returns from fixed-income savings instruments, discouraging investment in NSCs.
Masrur Reaz said the continued deficit reflects a deeper structural shift. “Tighter compliance and more attractive bank interest rates are diverting funds away from NSCs, while inflation is also influencing investor choices,” he said.
He noted that although the deficit has narrowed, weak demand persists. Going forward, he suggested the government should balance its borrowing strategy and develop a stronger bond market to reduce reliance on savings certificates.
Experts say the outlook for NSCs will depend largely on interest rate trends, inflation dynamics and future policy adjustments, with demand likely to remain subdued in the near term.
