State and private banks and non-banks are not allowed to invest their gratuity funds in government savings certificates, according to the central bank.

Under the Savings Law 1997 (amended 2002), firms and companies do not have the opportunity to put their gratuity funds in the five-year savings instruments, Bangladesh Bank said in a statement.

In recent months, companies may have moved their gratuity funds into savings certificates, as they offer higher interest rates, compared to banks and non-bank financial institutions.

The weighted average interest rate on deposits in banks dropped to 5.67 percent in May from 6.99 percent a year earlier. It averaged more than 8.21 percent in 2014.

On the other hand, the rate for savings instruments is close to 12 percent.