The government is reportedly considering lifting the purchase limit on savings bonds, according to Dr. Md. Khairuzzaman Mozumdar, Secretary of the Ministry of Finance. The announcement was made on Monday, 26 January, during the seminar titled “Bond Market Development in Bangladesh: Challenges and Recommendations” held in Dhaka.
Speaking at the event, Dr. Mozumdar noted that the government is reviewing current regulations governing the sale of savings bonds. “We are examining the possibility of increasing or even removing the purchase limits to facilitate greater participation among investors,” he said. He added that such a move could stimulate domestic investment and enhance liquidity in the financial market.
Dr. Ahsan H. Mansur, Governor of Bangladesh Bank, also addressed the seminar, highlighting the potential impact of a more dynamic bond market on the country’s financial ecosystem. According to Dr. Mansur, simplifying bond transactions could expand the bond market in Bangladesh to 6 trillion taka. He warned that large commercial enterprises cannot continue to rely solely on bank financing and must either attract foreign investment or actively participate in the domestic bond market.
Dr. Mansur emphasised that the future sustainability of the bond market is closely linked to inflation control and interest rate management. He suggested that adopting a uniform interest rate could make the market more resilient and attractive to investors, ensuring long-term stability.
Experts at the seminar discussed several potential benefits of removing savings bond limits and improving market access: increased investor participation, reduced dependency on traditional bank loans, and the promotion of foreign investment.
The key implications of the proposed changes can be summarised in the table below:
| Aspect | Current Status | Proposed Change | Expected Impact |
|---|---|---|---|
| Savings bond purchase limit | Restricted | Limit increase or removal | Greater investor participation, higher liquidity |
| Bond market transactions | Complex | Simplified and transparent | Market expansion, reduced reliance on banks |
| Interest rates | Multiple rates | Uniform rate | Market sustainability, enhanced investor confidence |
| Foreign investment | Limited | Encouraged through market participation | Increased capital inflow, stronger economy |
Analysts noted that if the government proceeds with these reforms, both individual and institutional investors would gain more flexibility, while the domestic bond market would become a more viable alternative to traditional bank lending. They also highlighted that such measures could attract foreign investors seeking stable returns, thereby contributing to Bangladesh’s broader economic growth.
The seminar concluded with a consensus that strategic regulatory adjustments, including raising or removing savings bond limits, would be a significant step towards deepening the country’s capital market and providing investors with more opportunities to participate in long-term financial instruments.