ISLAMABAD, Oct 15: The government is converting the Central Directorate of National Savings (CDNS) into an "authority" to enlarge its functions as well as to adequately benefit its employees.

Officials told Dawn here on Friday that the government had dropped the idea of making the CDNS a "corporation" as was earlier planned. The purpose of converting the organization into an authority is to have certain control of the finance ministry, which perhaps would not have been possible if it were to be made a corporation.

The affairs of the proposed authority will be supervised by a board of directors to be headed by the secretary finance of the federal government and will include secretaries of establishment and economic affairs division (EAD), deputy governor of the State Bank, additional secretary budget of the ministry of finance and one ex-banker of the national repute as its members.

CDNS Director General Awais Pirzada will be the first president of the authority. Mr Pirzada, who has spent more than three years in the CDNS, will continue to be its head because of successfully running the organization, the officials said.

The said an important meeting had been convened on Saturday in the ministry of finance to discuss and finalize the new draft that would convert the CDNS into an authority after its approval by the parliament and the cabinet.

At present the CDNS is marketing only government securities through a network of some 320 branches. With significant reduction in return on fixed securities brought about by the market conditions, small-savers were feeling frustrated as they have no access to those securities that offer better return.

Under the proposed programme, there will be an upgradation of all the national saving centres across Pakistan through a detailed automation programme. The number of transactions have increased manifold that warranted automation as it was becoming increasingly difficult to achieve desired results through manual handling of things.

Sources said the CDNS, whose portfolio had increased from Rs80 billion to Rs1 trillion along with four million plus clients, would enjoy a considerable financial autonomy after becoming an authority.

The CDNS, which was fulfilling the requirement of deposit banking functions, was expected to have its pay scales revised upward with a view to offering good salary packages to the employees after becoming authority.

A decision has also been taken to launch a "mutual fund" to be managed by professional assets management companies having a private sector management. This mutual fund will be a subsidiary of the proposed authority for which the government will initially provide the equity.

The proposed authority will diversify its business and play an important role in resource mobilization and increasing the availability of domestic resources for investment. The authority, the sources said, would also be allowed to introduce new products like offering funding for education, housing and marriages.

"The ongoing pensioners and welfare schemes of the organization will be further improved once the CDNS is converted into an authority," a source said. He pointed out some of the new schemes were also expected to be introduced.