The government has planned to bring more discipline in the operation of the National Savings Certificate (NSC).
As part of the plan, a fresh law has been designed in this regard to make the existing law time-befitting. The Finance Division has designed the proposed law.
The provision of punishment for providing false information to buy NSC as well as savings bonds is going to be incorporated in the proposed ‘Government Debt Act, 2021’. Another provision was also incorporated in the proposed law that allows running a Shariah-based deposit system alongside the normal one.
The Cabinet approved the draft of the ‘Government Debt Act, 2021’ on September 6. The proposed law will now be placed in the Parliament for its enactment. The fresh law may be passed in the House this year, sources said.
After the Cabinet’s approval, Cabinet Secretary Khandaker Anwarul Islam said that the fresh law has been drafted with a provision of maximum six months jail or a fine of Tk 1,00,000 or both for giving false information to buy savings certificates. If anyone lies about his deposited money and it is not shown in the income tax, it would be considered as false information. In this situation, he/she will be punished.
He further said that a new provision was also incorporated in the proposed law that allows running a Shariah-based deposit scheme.
According to the proposed law, Bangladesh Bank will act as an authority on behalf of the government to run the Shariah-based bond system.
The ‘Public Debt Act’ was enacted in 1944. Necessary amendments were made at different times. However, the loan system and the deposit system witnessed radical change in the time. Against this backdrop, the fresh law has been designed after detailed discussion. The proposed law will replace the law of 1944, said an official of the Finance Division.
According to the official, the purpose of the fresh law is to further expand the path of loan collection, formulation of sustainable policies and plans and preparation of loan strategies, assessment of risk and calculation of government liabilities for the departments concerned.
There are 40 sections in the draft law. It was said in the beginning of the proposed law that the main objective of the fresh law is to raise any kind of debt investment with or without interest or profit taken by the government or in domestic or foreign currency for financing the deficit or for any other purpose to meet the budget deficit of the government.
Sources said that the public debt is the total amount, including total liabilities, borrowed by the government to meet its development budget. The proposed law assured the people of a guarantee that the government would properly pay the debt they will take from common people. The people will be informed about the amount of money raised through the public debt law and the status or profit or interest paid on it.
The role of government loan offices has been fixed in the proposed law. The issue of the Shariah-based bond system came in the proposed law as the central bank has already launched ‘Sukuk bond’ in the country. Good response has already been received. The Sukuk was launched through circular following ‘Sukuk Guideline’. Now it is going to be run under the law.
The Bangladesh Bank had launched its maiden Sukuk bond in 2020 aiming to develop the Islamic bond market in the country and create investment opportunities for idle money at Shariah-based banks. The central bank sources said that the Shariah-based banks are holding 45 per cent of the country’s idle money.