November 03, 2007	Saturday	Shawwal 21, 1428

ISLAMABAD, Nov 2: Like other thorny issues, the government has decided to leave the much sought corporatisation of the Central Directorate of National Savings (CDNS) to its successor to be elected in coming months.

Informed sources told Dawn on Tuesday that the government was no more interested in converting the CDNS into Pakistan Savings either through presidential ordinance or an act of parliament.

Earlier, the corporatisation was delayed first to determine the status of its employees to be absorbed in the proposed Pakistan Savings for which new rules were drafted and re-drafted in the name of avoiding problems at a later stage.

However, the business of the organisation, sources said, continued to improve as the gross revenue amounting to Rs129.53 billion was received in the first quarter of 2007-08, while the net revenue stood at Rs26.1 billion. Both the gross and net revenues have doubled and the CDNS officials were confident of raising Rs100 billion plus net revenue before the current financial year ends on June 30, 2008.

The CDNS has given the option to its employees either to retain their present status of serving as civil servants or opt for corporatised employees. This was done in line with former Telephone and Telegraph (T&T) department and former Corporate Law Authority (CLA) which were later converted into Pakistan Telecommunication Company (PTCL) and Securities and Exchange Commission of Pakistan (SECP), respectively.

But some senior government officials wanted a unified grade which could be offered to the employees of the new organisation after the restructuring of the CDNS. The objective was to avoid litigation by any employee of the organisation.

According to the CDNS, its total stocks have risen to Rs1.067 trillion and it distributed Rs178 billion profit to its investors in 2006-07.

It also received gross new investment of Rs483.549 billion and repaid Rs415.898 billion during the last financial year.

The central bank has also allowed the CDNS to sell its products in Saudi Arabia and other Middle Eastern countries for which negotiations were now being finalised with foreign banks who would work on behalf of the directorate.

The plan is to sell government securities in Saudi Arabia, Kuwait and Qatar.

The CDNS is already selling its products in the United Arab Emirates (UAE), Oman and Bahrain through Habib Bank (HBL) and the United Bank (UBL).

In addition, a number of other new Islamic products were being prepared to be offered to the public once the CDNS achieved autonomy soon.

Currently there are five million investors of the CDNS who also include those two million who were doing business through banks and the post offices.

CDNS distributed Rs178 billion profit to its investors in 2006-07.

Also a ban on institutional investors was lifted by the CDNS about six months ago. But their investment has declined from 25 percent to about 15 percent, an official said.

The corporatisation of the CDNS had been pursued to ensure further investors’ confidence. In this behalf automation of the directorate has been achieved by handing over software to all its outlets. Local networking is complete and in next six months, the process is expected to be completed. It cost about Rs306 million to have this automation in the organisation. Since there involved financial transactions, the CDNS wanted to offer an improved system to its investors. The facility of ATM has been planned to be shortly offered to the investors.

CDNS officials maintained that they were offering the most cost effective source of business to raise funds for the government. And that is why defence certificates have attracted Rs290.14 billion investment followed by Rs205 billion special saving certificates last year. While the prize bonds attracted an investment of Rs174.15 billion.

It is also said that once the CDNS was corporatised, it will go into the Mutual Fund business. At the same time, it would offer new products for students and some other segments of society.