Dhaka Plans Publicity to Encourage Liquidity Injections into Bonds

In order to curb the economic effects of the Covid pandemic, the Government of Bangladesh is planning a full-fledged roadmap to promote liquidity inflows into at least five bonds.

UNB has lent that the government intends to expand investment facilities for these bonds—three for expatriates and two for local entrepreneurs, reports UNB.

According to sources in the Ministry of Finance and the National Revenue Board (NBR), apart from good income, expatriate investors in these bonds would be granted Commercial Important Person (CIP) status after investing a certain amount of money. 

In order to simplify investment requirements, the bonds will be converted from the US dollar to the multi-currency. This will encourage expatriates living in countries other than the US to invest in bonds. They wouldn't have to convert their currencies to the US dollar.

Currently, Wage Earners' Development Bond, US Dollar Premium Bond and US Dollar Investment Bond are there to encourage foreign currency collection from the expatriate Bangladeshis. All have been introduced by the National Savings Department.

On the other hand, local investors can invest in Treasury Bill and Treasury Bond.

After the pandemic, sources said the government will offer a huge amount of publicity and arrange road shows to draw investors from home and abroad, as the success rate so far is not at all satisfactory.

The Treasury and Loan Top Management of the Finance Division recently held a meeting with Finance Secretary Abdur Rouf Talukder as Chair. Representatives from the Bangladesh Bank, the National Savings Department and the National Revenue Board (NBR) were present.

At the meeting, the Finance Secretary said that there's an urgent need to take initiatives to improve investment of Bangladeshi expatriates in Wage Earners' Development Bond, US Dollar Premium Bond and US Dollar Investment Bond.

He also put emphasis on creating a separate module on Cash Management and Cash Forecasting from the Treasury and Loan Management wing of the Finance Division for possible allocation from the government.

The meeting was informed that everyday the expatriates are sending money in the country while the amount increased significantly as the government is giving two percent incentive. If these expatriates can be encouraged to invest their money in the respective three bonds, then they might give a positive response.

The meeting also highlighted the development of a clear roadmap and the execution of the same in such a way that expatriates invest with enthusiasm and patriotism in these bonds.

Sources suggest that if expatriates spend more than six months in particular three bonds and do not make any profit, they will earn 12 per cent interest after the completion of the tenure.

There is no restriction about how much money an expatriate can invest in these three bonds. These bonds are available in foreign exchange houses, foreign branches of local banks and Bangladesh Bank branches. One can take a loan from any local bank against these bonds. If the investor wants, he or she can repatriate the money.

The government has taken initiative to give Commercially Important Person (CIP) status for the investors who would invest Tk 8 crore or more in Wage Earners' Development Bond. The tenure of this bond is five years, one can invest Tk 25,000 to Tk 50 lakh and can withdraw the profit after every six months.

The length of the US Dollar Premium Bond is three years, the investment size of the US Dollar Premium Bond is from USD 500 to 50,000. The benefit is 7.5 per cent after the end of the tenure, and every six months the profit can be taken away.

US Dollar Investment Bond is also held for three years, with a profit margin of 6.5 per cent, while the maximum investment cap for this bond is USD 50,000.

A senior official of NBR told UNB that the initiative of conducting roadshows and massive publicity to attract more investment from the expatriates "is a time-befitting step". "If the expatriates get more ideas regarding these bonds, it will help them a lot to come forward to investing in them," he said.