ISLAMABAD, Sept 15: The total stocks of the Central Directorate of National Savings (CDNS) rose to Rs1.067 trillion and it distributed Rs178 billion profit to its investors in 2006-07, said its senior official.
“We also received gross new investment of Rs483.549 billion and we repaid Rs415.898 billion during the last financial year,” Ahmad Owais Pirzada told a news conference here on Saturday.
He said that the central bank has allowed the CDNS to sell its products in Saudi Arabia and other Middle Eastern countries for which negotiations were being finalised with foreign banks who would work on behalf of the directorate.
The plan, he said, was 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 Limited (HBL) and the United Bank Limited (UBL).
“We would offer some good products to overseas Pakistanis and as soon as things are finalised we would start our business outside Pakistan,” he said.In addition to that, Mr Pirzada said that a number of other new Islamic products were being prepared to be offered to the general public once the CDNS achieved autonomy soon.
Responding to a question, he said that the ban on institutional investors had been lifted by the CDNS about six months ago. “But their investment has declined from 25 per cent to about 15 per cent,” he added.
He informed the press conference that another review of offering increased rate of interest on various national saving schemes was shortly due. Earlier, it offered little over 0.5 per cent more profit to its investors.
However, he said that benchmark of the CDNS profit was Pakistan Investment Bonds (PIBs) which were set by the central bank. But he agreed that interest rate on various saving products was less than India and Bangladesh.
Responding to a question, he said that there required legislation to convert the CDNS into Pakistan Savings to make it fully autonomous organisation. The federal cabinet, he said, has already approved the proposal of having new independent organisation which will have its own rules and pay scales.
He said it took time to get the approval of the central bank, Securities and Exchange Commission of Pakistan (SECP), Law and Justice Division and Establishment Division for creating a new organisation. “It was delayed because it required the vetting by seven organisations”.
Mr Pirzada said that the president could promulgate the ordinance for creating Pakistan Savings. But he said it would be good if the matter was legislated by the parliament and the issue was resolved once for all.
The corporatisation of the CDNS, he said, was being pursued to ensure further investors’ confidence. In this behalf, he referred to automation of the directorate by handing over software to all its outlets. Local networking is complete and in next six months time, the process would be finished satisfactorily at the cost of Rs306 million,
he said.
He said since it involved financial transactions, the CDNS wanted to offer an improved system to its investors. The facility of ATM, he said, would
also be offered.
Answering another question, he said that there were five million investors of the CDNS which also included those two million who were doing business through banks and the post offices.
He said that CDNS was offering the most cost-effective source of business to raise funds for the government.Giving the details of CDNS business, Mr Pirzada said that defence certificates have attracted Rs290.14 billion investment followed by Rs205 billion special saving certificates while the prize bonds attracted Rs174.15
billion during the last financial year.
He 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.