ISLAMABAD: The government has changed the nominee rules for investors and certificate holders of National Savings Schemes (NSS) on the court orders to ensure payment of dues to ‘legal heirs’ instead of ‘nominated persons’ as required under Muslim Law of Inheritance.

The finance ministry on Tuesday said the Sindh High Court (SHC), in its judgement of Aug 23, 2016 had ordered the authorities to align NSS rules and procedures so that payment of principal amount and profit thereon (if any), in case of death of a certificate purchaser/investor, would be made to his/her legal heirs according to the succession certificate issued by a court in accordance with Muslim Law of Inheritance that was currently applicable in Pakistan.

The court had issues directives for doing away with the previous practice whereby a person was nominated by a certificate purchaser/investor in the event of his/her death. “In light of the orders of the Honorable Sindh High Court, the proposed changes in the rules were twice widely publicised through print and electronic media to solicit public opinion”, the ministry said.

Also, the Central Directorate of National Savings (CDNS) carried out further due diligence keeping in view the suggestions received from the public and in light of decision of the SHC and decisions of Supreme Court given on different petitions.

“The rules were vetted by the Law and Justice Division, which were subsequently approved by the 10-member Cabinet Committee for Disposal of Legislative Cases (CCLC) and Federal Cabinet,” the ministry said. The response of the general public had been positive as many legal heirs were being deprived of their due inheritance as the previous rules were not in line with the law of the land, it added.

The CDNS has issued numerous saving schemes like Defence Saving Certificates, Bahbood Saving Certificates, Pensioner Certificates and Accounts, National Savings Deposit Accounts and Post Office Savings Bank Accounts to help raise cheaper funds from public to meet financial gap. The saving schemes also provided a safe avenue of saving and investment to the people and relief and social security to vulnerable segments of society.

The CCLC and the federal cabinet had reached the decision after they were told that the existing NSS rules provided that in case of death of a NSS investor, principal amount and accrued profit were paid to the nominees, according to the shares as set by the investor or account holder, at the time of opening of account.

However, the SHC directed the authorities to align these rules/procedures of payment to the nominees with Muslim Law of Inheritance. When put to pubic review, proposed changes in the rules of nomination attracted 174 objections and suggestions by April 2018.

The amendments to the Rules of National Savings Schemes have now provided that in case of death of the purchaser of certificates, payment of principal amount and profit till date of payment in respect of certificates of the deceased will be payable to logical heirs according to the succession certificate issued by a court of competent jurisdiction.

However, in case where total net payable amount does not exceed Rs100,000, payment will be made to the nominees, upon furnishing a duly verified and attested copy of Family Registration Certificate issued by Nadra and an affidavit specifically set out for the purpose, to the effect that he or she will be bound to distribute the received amount among all legal heirs according to their due share as per law of the land.

Published in Dawn, November 4th, 2020