DUBAI — A history making record mobilisation of savings has increased the total net portfolio of Pakistan’s Central Directorate of National Savings, or CDNS, by 70 per cent in the past three years from Rs1 billion in 2008-09 to Rs1.8 billion in 2010-11, according to a top official of the directorate.

CDNS Director-General Zafar M. Shaikh said in an interview that the sharp increase in the portfolio has brought the savings ratio to GDP to double digit from nine to 14 per cent in the three years.  

He said that non-resident Pakistanis, or NRPs, will soon have online access through the website of the CDNS for investment in the directorate’s savings schemes after the re-launching of dynamic web portal of National Savings. 

Zafar said that National Savings is also working to introduce Shariah-compliant short-term government paper soon, he added. National Savings’ existing products include Special Savings Certificates/Accounts, Regular Income Certificates, Defence Savings Certificates, Special Products, National Savings Bond, Savings Account, and Prize Bonds.  With an investor base of over six million, National Savings Schemes are offered all over the country through a wide-spread network of 372 National Savings Centres, Pakistan Post Offices, Authorised Commercial Banks and Offices of the State Bank of Pakistan. NSS are also available to NRPs in UAE, Bahrain and Oman through the branches of Habib Bank Ltd and United Bank Ltd.

He said that National Savings Bonds are being traded on the stock exchange. Government’s first-ever listed tradable bond “NSB” were successfully launched for strengthening the secondary market of debt securities.  A bond management unit has been established for the management and launching of new schemes.

Zafar said that precision has been achieved in debt servicing forecasts viz-a-viz actual. He said that Overseas Pakistanis Facilitation Desks have been established at 12 Regional Directorates for value added services to NRPs. 

For the last 60 years, National Savings records were maintained manually; now under the automation project 90 branches have been computerised since July 2009 despite limited funds. By end of September this year, a total of 108 branches will be computerised in a 27-month period, he said.

He said that an inflow target for the portfolio has been fixed at Rs200 million for 2011-12. However, outflow is estimated at Rs400 million because all institutions can not invest their funds, including pension and gratuity, in National Savings since April 2011. So, National Savings has to repay all dues on the due dates. “We are confident that we will recover all gaps by pursuing the individual savers particularly as we see heavy growth in the currency in circulation,” he said.

Zafar said that the Draft Pakistan Savings Bill 2010 for the purpose of restructuring and transformation of the CDNS into an autonomous body corporate has been approved, in principle, by the cabinet. “This was a long outstanding issue which has been resolved. The conversion would strengthen National Savings,” he said. 

Zafar explained that as per the new vision of the organisation, it will be the premier provider of diversified savings products, primarily risk-free government securities, act as sole source of cost effective non-bank financing for government of Pakistan and to play an effective role to promote primary and secondary domestic capital market, be partner in economic development by cost effective project financing for mega national projects, and provide best in class customer services by using state of the art technologies. 

He said that the organisation will act as distributing channel to sell various government papers structured to strengthen the government corporations and to deepen the domestic debt market, computerise all NSCs by 2013, and expand the branch network from 372 to 500 branches. 

It will offer different flavours of investment/savings products according to changing financial needs, obtain the membership of the Clearing House, provide exchange services for home remittances to NRPs, and expand network to tap investment from NRPs by entering into strategic alliances with active and efficient banks in the Gulf region, followed by the second phase to tap investment from European market, Zafar said.

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