QUETTA, July 19: Reduction of 1.5 per cent in the national savings current accounts profit rate was made for the survival of banks and other financial institutions, which could not afford to offer high rate of profit percentage to their clients.

This was stated by the Director General of National Savings Organization, Ahmed Awais Pirzada, at a press conference.

He dispelled the impression that reduction in the profit had been made due to the pressure of the World Bank or the IMF.

“It is absolutely an economic decision to make the national economy more stronger,” Pirzada said, adding that it would not adversely affect the common people, who “are our clients.”

He said 80 per cent of the national savings clients belonged to different institutions, who took the main benefit from the national savings schemes and exploited the national resources. Only 20 per cent of the clients were from the lower class, including pensioners and widows.

Last year, he said, Rs30 billion out of the total profit of Rs80 billion went to these institutions. In view of this situation, he added, the government decided to change its policy in this regard.

The national savings director general said basically savings schemes were launched for the middle and lower middle class but later various institutions were allowed to invest their money in these schemes. However, he added, the government had now decided not to allow any new institution to invest in these schemes.

Responding to a question, he said with the reduction of profit rate the functioning and schemes of national savings would not be affected.

The savings percentage in Pakistan is 14.5 per cent, which, he observed, was not encouraging as saving percentage in the other countries of the region, including Bangladesh, Sri Lanka and India, was better than Pakistan. The National Savings Organization, he further said, would be launching a pilot project in the country to provide maximum facilities to its clients. In the first phase, he added, all systems would be computerized in Rawalpindi region.