ISLAMABAD, Nov 2: Vested interests in the bureaucracy are holding up the conversion of the Central Directorate of National Savings (CDNS) into a corporation as approved by Prime Minister Shaukat Aziz, Dawn learnt on Thursday.
Sources in the finance ministry said the prime minister approved the requisite draft law for creating Pakistan Savings almost a year ago but the matter was being dragged on and on.
The objective of converting the CDNS into corporation is to enlarge its functions as well as to adequately benefit its employees.
The officials of the cabinet division have informed the Prime Minister’s Secretariat that they were still awaiting to receive the draft law from the finance ministry to formally place it in the parliament for legislation.
They said that unless they get the approved draft law from the ministry of finance, they were unable to proceed further and that the ministry be directed to expedite the issue.
Sources said that during the last couple of meetings, the prime minister had inquired as to who was resisting the idea of offering more autonomy to the CDNS. “There is no point in delaying the issue and if the prime minister cannot get his orders implemented then the idea of corporatising the CDNS should be shelved,” said a source.
A wake up call, he said, needed to be given to the concerned people to carry out the task of converting the CNDS into a corporation as was forcefully pleaded by the prime minister.
He said that the confusion was mounting in both the employees and the investors over the delay in taking a decision about the status of the CDNS.
Sources said that the Board of Directors of the proposed Pakistan Savings would be headed by the secretary finance of the federal government and would include secretaries Establishment, Economic Affairs Division (EAD), deputy governor State Bank, additional secretary budget of the ministry of finance and one ex-banker of the national repute as its members.
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 reportedly frustrated as they have no access to those securities that offer better return.
Sources said that CDNS, whose portfolio has increased from Rs80 billion to Rs1 trillion along with 4 million plus clients, would enjoy the considerable financial autonomy after becoming a corporation.
The CDNS, which was fulfilling the requirement of deposit banking functions, was expected to have its pay scales revised upward with a view to offer good salary packages to the employees after becoming the corporation.
A decision in principle 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 corporation for which the government will initially provide the equity.
The proposed corporation will diversify its business and play an important role in resource mobilisation and increasing the availability of domestic resources for investment.
The corporation, sources said, will also be allowed to introduce new products like offering funding for education, housing and marriages.
The ongoing pensioners and welfare schemes of the organisation will be further improved once the CDNS is converted into a corporation, a source said. He pointed out some of the new schemes were also expected to be introduced.