Govt likely to allow banks to sell saving certificates: Proposal to be placed before cabinet
By Ihtasham ul Haque
ISLAMABAD, Feb 21: The government is likely to restore the agency status to all the authorized banks to sell savings certificates of the Central Directorate of National Savings (CDNS).
Official sources told Dawn on Tuesday that Prime Minister Shaukat Aziz had directed the officials concerned to take this step for removing hardships faced by the people for continuing any National Savings Scheme (NSS).
And as a first step, a decision has been taken that the existing certificates, issued by the banks on or after 15/6/2003, which were discontinued after the suspension of functions of the banks as agencies, could now avail of the facility of reinvestment benefits till maturity or encasement, whichever is earlier provided for the rules.
The decision was taken to benefit a large number of people living abroad who could not visit their banks in Pakistan on the specific dates after the discontinuation of the bank functions.
The sources said thousands of branches of the authorized banks would shortly be notified to formally start functioning on behalf of the CDNS as agency.
They said the ministry of finance would soon be placing a draft before the federal cabinet to convert the CDNS into an autonomous “Pakistan Savings”. The prime minister has in principle agreed to have this Pakistan Savings to promote its business and to add more functions into it.
The government is also considering a plan to allow the proposed Pakistan Savings to go into the mutual funds business and also work like other Financial Development Institutions (DFIs).
“A number of multi-dimensional targets and goals are currently being finalized, which will be undertaken in next six months after the approval of the Pakistan Savings first by the cabinet and then by parliament,” a source said.
Simultaneously, he pointed out, the restructuring of the organization would be started to make it more efficient and service-oriented. It would allow the officials concerned to also induct new people in the organization on batter salary packages.
The sources said the Pakistan Savings would function like an independent body by having its own board of directors.
Presently, 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, all the national saving centres across Pakistan will be upgraded through a detailed automation programme. The number of transactions have increased manifold that warranted automation as it is becoming increasingly difficult to achieve desired results through manual handling of things.
The sources said the CDNS, whose portfolio has increased from Rs80 billion to over Rs1 trillion along with 4 million plus clients, will enjoy the considerable financial autonomy after becoming the Pakistan Savings.
The CDNS was expected to have its pay scales revised upward with a view to offer good salary packages to the employees after conversion.
The sources said the proposed Mutual Fund would be managed by professional assets management companies having a private sector management. This fund will be a subsidiary of the Pakistan Savings, for which the government will initially provide the equity.
