Savings Certificate Sales Marred by Irregularities at 40 Banks
Graphics: Agamir Somoy
Several Bangladesh Bank officials recently visited branches of private commercial banks posing as customers seeking to purchase savings certificates. At some branches, they were bluntly told that the bank did not sell savings certificates. Even when they approached branch managers for confirmation, they received the same response. However, under directives issued by the National Savings Directorate, banks authorized to sell savings certificates are not allowed to refuse service to eligible customers without valid grounds.
Complaints that commercial banks are reluctant to sell savings certificates and often fail to provide proper customer service are not new. To verify those allegations, at least 10 teams from Bangladesh Bank's Debt Management Department (DMD) conducted surprise inspections at various banks on Sunday. While attempting to purchase savings certificates without revealing their identities, the officials found evidence supporting the complaints. They identified irregularities and unprofessional conduct at branches of at least 40 banks involved in the sale of savings certificates. In many cases, responsible bank officials appeared unwilling to provide the service, citing various excuses. Some officials even said they had never provided savings certificate services before.
Banks and financial institutions authorized to sell government savings certificates are required to strictly comply with existing laws, regulations, and government directives. Under instructions issued by the Internal Resources Division (IRD) of the Finance Ministry and the National Savings Directorate, banks responsible for selling savings certificates cannot unreasonably refuse service to any eligible customer. Once customers submit applications in accordance with prescribed rules and provide the required documents, including a national identity card, TIN certificate where applicable, proof of e-return filing, KYC information, and other necessary records, banks are obligated to accept the application and issue the savings certificates. Authorities may take administrative or legal action against institutions that violate these provisions.
A Bangladesh Bank official, speaking on condition of anonymity, told Agamir Somoy that his team conducted surprise visits to four bank branches in Dhaka. During one visit, he witnessed two customers seeking to purchase savings certificates. A desk officer turned one customer away, claiming the bank did not sell savings certificates. Another customer was told to go to a different bank branch because he had been referred by another bank.
The official said, “Even if a branch does not directly sell savings certificates, it is still required to accept the necessary documents and take the appropriate steps. It is surprising that many people are unaware of this.”
Nurjahan Begum of Dayaganj visited The Premier Bank's Dholaikhal branch in Old Dhaka to purchase a savings certificate. She was not even allowed to enter the bank after being told that savings certificates were not sold there. A nearby branch of Midland Bank also turned her away.
Bangladesh Bank's spokesperson and executive director said he was not aware of the undercover inspections and referred inquiries to Debt Management Department Director Istekmal Hossain. Hossain said, “Our 10 teams visited branches of 40 banks without revealing their identities to assess the actual situation regarding savings certificate sales. We found various irregularities. Many officials did not behave professionally. Some even claimed that their branches had never sold savings certificates. Yet all banks are required to provide this service. If they do not have the National Savings Directorate's ID and password, they must still accept the documents, provide acknowledgment, and note the relevant branch name on the form.”
He said the inspections would continue.
“Banks can no longer turn customers away at their discretion. Failure to comply with the rules will result in financial penalties,” he added.
Earlier, on June 24, Bangladesh Bank's Debt Management Department issued new instructions on savings certificates to the managing directors and chief executive officers of all scheduled banks. The directive noted that complaints had surfaced on social media alleging that banks were not selling savings certificates.
According to the National Savings Directorate, four types of savings certificates are currently available: Family Savings Certificate, Pensioner Savings Certificate, Five-Year Bangladesh Savings Certificate, and the Quarterly Profit-Based Savings Certificate. Upon maturity, these instruments offer interest rates ranging from 11.77 percent to 11.98 percent. In addition to the National Savings Directorate, scheduled banks are also authorized to sell savings certificates.
