ISLAMABAD, Sept 28: The ministry of finance has finalized a draft law to convert the Central Directorate of National Savings (CDNS) into an autonomous corporation.
Informed sources told Dawn here on Tuesday that the draft law would soon be tabled in the Parliament for approval.
The name of the new organization has been proposed as 'Pakistan Savings' but some officials believed its name should be National Savings Corporation. The draft law has been finalized by the officials of the ministry of finance and the CDNS.
The proposed corporation would be run on commercial lines. 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 feeling frustrated as they have no access to those securities that offer better return.
Under the proposed programme, there would be an up gradation of all the national saving centres across Pakistan through a detailed automation programme. The number of transactions have increased manifold that warranted automation as it was becoming increasingly difficult to achieve desired results through manual handling.
The Sources said that CDNS, whose portfolio has increased from Rs80 billion to Rs1 trillion along with 4 million plus clients, would enjoy all financial autonomy aimed at developing corporate culture in the organization.
The CDNS, which was fulfilling the requirement of deposit banking functions, was expected to have its pay scales revised upward with a view to offering good salary packages to the employees.
Currently, about 70 per cent employees of the CDNS were in grade 16, while 10 per cent in grade 17 and the rest of them in grades 11-14. It has been argued that if the CDNS was made an autonomous organization, its employees should get batter salary packages, which would help them perform better.
The sources said a decision has also been taken to launch a "Mutual Fund" by the new organization which would be managed by professional assets management companies having a private sector management. This mutual fund would be a subsidiary of the proposed corporation for which the government would initially provide the equity.
The new company would diversify its business and play an important role in resource mobilization and increasing the availability of domestic resources for investment. It was expected that the change would greatly improve the quality of services as well as cater to broader national coverage.
There was another option currently been discussed according to which this proposed mutual fund could be launched by using a launching pad of some other companies but the products should be identified by the new corporation.
The Sources said that the new corporation would also be allowed to introduce new products like offering funding for education, housing and marriages. It was said that 25 per cent of the total portfolio of the CDNS belonging to institutional investment including banks has been paid by the CDNS due to which there was some drop in the net portfolio.