Research Analyst
Dec 19 - 25, 2011

The history of national savings organization dates back to the year 1873 when the Government Savings Bank Act, 1873 was promulgated.

The British government introduced several schemes for collection of funds to meet the expenditures during the First World War. It was in this context that the post office cash certificates and, during the Second World War, post office defense savings certificates were floated.

The need to set up a separate agency was felt and a national savings bureau was established in 1943-44 as an attached department of the ministry of finance (MoF) of the undivided government of India.

At that time, the main functions of the savings department were to initiate all policy matters and issue directives for the execution of policy decisions of the central government, and review the savings schemes from time to time. Gradually, savings organization were established in almost all the provinces of the subcontinent with the objective of popularizing the savings schemes among the masses as well as to supervise, guide and control the working of authorized agents under their jurisdiction.

These authorized agents were in those days the only agency for securing investment in terms of savings certificates from the general public.

In a nutshell, the central agency viz. national savings bureau, Simla, was mainly concerned with the policy and planning matters of the savings schemes whereas the responsibility of execution of various savings schemes vested with the provincial authorities.

At the time of independence, there was no time for any sort of innovations in the field of administration. Thus, an organization with the name of 'Pakistan savings central bureau' was created and the savings work was entrusted to it by the government of Pakistan, but this bureau had its own peculiarities.

In 1953, the Pakistan savings control bureau was renamed as central directorate of national savings and it carried out the functions on the lines of national savings bureau but as a part and parcel of the finance division, central directorate of national savings was only responsible for publicity, and the operative agents were the provincial governments as well as Pakistan post offices.

However, the entire expenditure in this regard was borne by the central government.

Till Dec, 1971, the national savings organization functioned as a publicity organization and its activities were merely promotional in nature. But, in early 1972, the scope of its activities was enlarged as the central directorate started selling II-rupee prize bonds, and subsequently engaged in the operations of other savings schemes.

Recently, national saving scheme (NSS) has decided to reduce the rate of return on its investment schemes on account of a reduction in discount rate by the state bank followed by a revision in the rates of Pakistan investment bonds (PIBs) and market treasury bills (T-bills).

According to Alfalah Securities, the rate of return on 3-year saving scheme has been reduced from 13 per cent to 12.5 per cent per annum, while the rate of return on 5-year saving schemes has been reduced from 13.4 per cent to 12.6 per cent per annum.

Moreover, the rate of return on defense saving certificate has been fixed at 12.6 per cent from 13.5 per cent previously whereas, the investors aged above 60 years would be given a return of 14.4 per cent from previous 15.36 per cent per annum under the Behbud scheme.

The Central Directorate of National Savings (CDNS) has also reduced the target of funding raised under national savings from Rs40 billion achieved in financial 2010-11 to Rs37 billion for FY12 on the back of a ban imposed on investments made by institutional investors.

The national savings organization is the biggest nonbank borrowing institution for the government, with over six million account holders investing more than Rs1,500 billion.

The government of Pakistan introduced defense savings certificate scheme. The scheme has specifically been designed to meet the future requirements of the depositors. These certificates are available in the denominations of Rs500, Rs1000, Rs5,000, Rs10,000, Rs50,000, Rs100,000, Rs500,000 and Rs.1,000,000.

Keeping in view the periodic needs of depositors, this three years' maturity special savings certificates scheme was introduced in 1990. These certificates are available in the denomination of Rs500, Rs1000, Rs5,000, Rs10,000, Rs50,000, Rs100,000, Rs500,000 and Rs1,000,000.


From To (%p.a.) (%p.a.)
1-Oct-10 31-Dec-10 8.75 8.00
1-Jan-11 30-Sep-11 9.00 9.00
1-Oct-11 Till Date 8.50 8.50

Further, regular income certificates are also available in the denomination of Rs50,000, Rs100,000, Rs500,000, Rs1,000,000, Rs5,000,000 and Rs10,000,000.

Profit is paid on monthly basis reckoned from the date of issue of certificates.

Bahbood Savings Certificates ten years' maturity scheme was launched by the government in 2003.

Initially, the scheme was meant for widows only. However, the government later decided to extend the facility for senior citizens aged 60 years and above with effect from January 2004.

These certificates are available in the denominations of Rs5,000, Rs10,000, Rs50,000, Rs100,000, Rs500,000 and Rs1000,000.

During 2003, the pensioner's benefit account scheme was launched by the government. The deposits are maintained in the form of accounts and the profit is paid on monthly basis reckoned from the date of opening of the account.

The pensioners of federal government, provincial governments, and government of Azad Jammu and Kashmir, armed forces, semi government and autonomous bodies are allowed to invest.

Savings account is the oldest scheme among the national savings instruments. The scheme has been designed to encourage the small savers and meet their day to day needs. This is an ordinary account and frequent withdrawals (thrice a week) can be made through this account.