With reliance on bank borrowing surging to cover fiscal shortfalls, the government is now investigating why investments in national savings instruments have sharply declined, officials said.

The Ministry of Finance has directed the Directorate of National Savings to identify causes behind persistently low net sales, despite similar returns from savings tools and bank deposits.

Net sales of savings instruments were negative by Tk 74.31 billion during July–April FY25, as encashments outpaced fresh investments.

A recent meeting of the Cash and Debt Management Committee, chaired by Finance Secretary Dr Khairuzzaman Mozumder, reviewed the government’s fiscal position. Officials noted that heavy borrowing from commercial banks—Tk 1.22 trillion by June 15—exceeded the revised annual target of Tk 990 billion.

This rising reliance on banks is said to be limiting credit availability for the private sector, dampening investment and job creation.

A senior finance official attributed the sustained drop in savings investment to tighter regulations introduced a few years ago, including the requirement of Tax Identification Numbers (TIN) for buyers. “These measures may have discouraged many investors,” he said.

Former World Bank economist Dr Zahid Hussain noted that weak deposit growth across banks signals limited public capacity to save. “People lack idle money to invest in term instruments,” he said, adding that the focus should now shift to enhancing revenue collection rather than deepening borrowing.

“The government must prioritise increasing earnings and reducing the budget deficit,” he said.