Govt to revisit decision about rate cut of postal savings: Mustafa Kamal

Finance Minister AHM Mustafa Kamal on Wednesday said the government would revisit the decision to cut interest rate of postal saving scheme, reports UNB.

His comment came against the backdrop of the widespread concern among savings certificate holders, mainly from pensioners and middle-class people following interest rate cut of postal savings scheme.

Kamal was talking to reporters after the meeting of Cabinet Committee on Public Purchase at the Cabinet Division.

The government on February 13 slashed the interest rate on savings in post office by half to facilitate implementation of the single-digit interest rate in the country’s banking sector.

Finance Ministry’s Internal Resources Division published a gazette notification with immediate effect. According to it, the interest rate on three-year fixed deposit was reduced to 6 percent from 11.28 percent on maturity.

The interest rate for the first year and second year of the deposit has been set at 5 percent and 5.5 percent from previous 10.20 percent and 10.70 percent respectively.

Meanwhile, the interest rate on savings in ordinary accounts of post office has also been reduced to 5 percent from 7.5 percent.

The decision triggered huge criticism from depositors. Economists said it would severely affect the middle-class and pension holders.   

Mustafa Kamal, however, questioned the idea of keeping interest of saving certificates higher while bank interest rate is getting lower.

“If we keep the interest rate of saving instrument higher, banks won’t be able to do business and none would deposit money in banks,” he said.

“But I’ll look into the matter. I do agree that in one push, the interest rate should not be slashed to half,” he added.