ISLAMABAD, Sept 23: The government has decided to convert the Central Directorate of National Savings (CDNS) into a ‘corporation’ to enlarge its functions as well as to adequately benefit its employees.

Informed sources told Dawn on Friday that the decision to covert the CDNS into a corporation was taken on the recommendations of the State Bank and the Securities and Exchange Commission of Pakistan.

Both the organizations have formally given their point of view a few days ago in favour of the corporation and recommended to the federal government to offer further autonomy to the CDNS.

The ministry of finance has held two meetings recently to finalize the issue. Now a new draft was being prepared, which will be submitted to Prime Minister Shaukat Aziz for final approval.

The sources said that as soon as Finance Secretary Naveed Ahsan returned from his foreign tour the new draft would be sent to the Prime Minister’s Secretariat early next month.

The government had earlier dropped the idea of making the CDNS a corporation and was rather considering having an authority. But eventually, the sources said, it was decided to have a full-fledged corporation, which would not only be more helpful to the employees, but could also introduce more products in the market.

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

At present the CDNS is marketing only government securities through a network of some 320 branches. With a 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, the sources said, had increased manifold that warranted automation, as it was becoming increasingly difficult to achieve the desired results through manual handling of things.

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

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

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 new corporation for which the government will initially provide the equity.

The proposed corporation will diversify its business and play an important role in resource mobilization and increasing the availability of domestic resources for investment.

The new corporation, the sources said, would also be allowed to introduce new products like offering funding for education, housing and marriages.