National Savings Certificates have quietly become one of the government’s most important financing tools. In FY2024-25, they brought in a net BDT128 billion of the government’s BDT1,348 billion domestic financing. And the outstanding stock now stands at roughly BDT3.35 trillion, close to 30 percent of total domestic public debt. For a country still building out its capital markets, that is a remarkable vote of confidence from ordinary savers. Yet the machinery behind this trust has not kept pace with the rest of Bangladesh’s financial system.
To be fair, part of the process already works well. Profit payments and maturity proceeds are credited automatically to investors’ bank accounts through EFT/BEFTN. That single change has cut down on paperwork fraud and spared savers the trouble of standing in bank queues.
The trouble starts at the two points that matter most to a saver: buying a certificate, and premature encashment (early redemption). Anyone wanting to buy a new certificate today still has to visit a branch in person, fill out a form, and attach a photograph and a photocopy of their National ID, both attested by a gazetted officer. A copy of the income tax return is also required for investments above a certain ceiling. Meanwhile, that same person’s identity may already be fully verified – through e-KYC in their bank. Asking them to repeat the process on paper is, at this point, simply redundant.
Early encashment is worse. If someone needs their money before maturity, they must first submit a formal request to the branch manager. When that request is processed, a bank official logs into the National Savings Department’s server and triggers an OTP to the customer’s phone. The customer then has to share that OTP with the official to complete the transaction. This happens even though the same customer’s banking app might already have its own PIN and two-factor authentication. Handing over a one-time code to a bank official at the counter is precisely the kind of practice that banking apps were built to eliminate.
The fix is not complicated, and it does not require new infrastructure. Banks and MFS providers already hold verified KYC data for their customers. If the National Savings Department’s back-end were connected to these platforms through a proper API, a customer could buy a certificate – nominee details and all – directly from their banking or MFS app, drawing on their verified account balance. Early encashment could work the same way. The app calculates the net payout after applicable deductions. The customer authenticates with their own PIN or fingerprint. The money moves straight into their account. No branch visit, and no OTP handed over to a stranger at a counter. There is also a case for going a step further. MFS wallets could be linked directly into the system, not just bank accounts.
Letting maturity proceeds flow straight back into the same wallet would close the loop. Savers could move between saving and everyday spending – bill payments, merchant purchases – without ever touching cash. None of this is a minor administrative tweak. This instrument carries 30 percent of the government’s domestic debt. It deserves an operating system built for 2026 – not one still designed around gazetted-officer attestation and shared passwords at a counter.
Connecting the National Savings Department’s systems to the banking and MFS ecosystem would do three things at once. It would cut down harassment at branches. It would tighten data security. And it would ease the administrative load on bank staff who currently process these applications by hand.
Bangladesh’s fintech sector did not build e-KYC, biometric verification and instant transfers for nothing. Putting that infrastructure to work for the country’s largest household savings instrument is an overdue step – and, at this point, a fairly straightforward one.
The views expressed in this article are solely those of the author
The writer is an Additional Director, Bangladesh Bank. E-mail: [email protected]
