NATIONAL SAVINGS ORGANIZATION

S.KAMAL HAYDER KAZMI,
(feedback@pgeconomist.com)
Research Analyst
, PAGE
Nov 12 - 18, 2012

The History of National Savings Organization dates back to the year 1873 when the Government Savings Bank Act, 1873 was promulgated.

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 re-named as central directorate of national savings (CDNS) and it carried out the functions on the lines of National savings bureau Simla but as a part and parcel of the finance division,

CDNS is engaged in making innovative efforts to promote a saving culture in the country. The CDNS offers attractive saving products to various categories of people to suit their specific needs. CDNS is currently engaged in restructuring of the CDNS to better cater for the needs of the investors and introduce more profitable products. Focus is on introducing short term saving certificates and expansion of CDNS network not only across the country but also to overseas Pakistanis.

In August 2012, the government had reduced the profit rates on National Saving Schemes. The decision was taken after the reduction in the interest rates. WhileÇ the new profit rate on special saving certificates - a three-year maturity scheme on which profit is paid semi-annually - will be 10.8 per cent.

Profit rates have been reduced on the Regular Income Certificates - a five-year maturity scheme on which profit is paid monthly from the date of issue - by 1.32 per cent and on Defense Certificates - a ten-year maturity scheme with a feature of automatic reinvestment after maturity by 1.18 per cent.

DEFENSE SAVINGS CERTIFICATE

The scheme has specifically been designed to meet the future requirements of the depositors. This is 10 years' maturity scheme with built in feature of automatic reinvestment after the maturity. These certificates are available in the denominations of Rs.500, Rs.1000, Rs.5,000, Rs.10,000, Rs.50,000, Rs.100,000, Rs.500,000 and Rs.1,000,000/=.

SPECIAL SAVINGS CERTIFICATES (REG.)

Keeping in view the periodic needs of depositors, this three years' maturity scheme was introduced in 1990. These certificates are available in the denomination of Rs.500, Rs.1000, Rs.5,000, Rs.10,000, Rs.50,000, Rs.100,000, Rs.500,000 and Rs.1,000,000/=. Profit is paid on the completion of each period of six months.

REGULAR INCOME CERTIFICATES

The five years' maturity regular income certificate scheme was launched in 1993. These certificates are also available in the denomination of Rs.50,000, Rs.100,000, Rs.500,000, Rs.1,000,000, Rs.5,000,000 & Rs.10,000,000/=. Profit is paid on monthly basis reckoned from the date of issue of certificates.

BAHBOOD SAVINGS CERTIFICATES

This 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 Rs.5,000/-, Rs.10,000/-, Rs.50,000/-, Rs.100,000/-, Rs.500,000 and 10,00000/-.

SAVINGS ACCOUNT

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

SPECIAL SAVINGS ACCOUNT

The three years maturity was scheme introduced in 1990. The deposits are maintained in form of an account. Profit is paid on the completion of each period of six months. This account can be opened by an individual in his name or in the name of minor(s) dependent on him or by two individuals jointly in their names. In addition to above individual investors, the following institutions are also allowed to invest in the scheme, subject to their registration under the relevant law for the time being in force.

PENSIONERS BENEFIT ACCOUNT

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 & Kashmir, Armed Forces, semi Government and autonomous bodies are allowed to invest.

NATIONAL SAVINGS SCHEMES (NET INVESTMENT) (RS. BILLION)

NAME OF SCHEME 2007-08 2008-09 2009-10 2010-11 2011-12
(JUL-MAR)
Defence Savings certificates (4,317.43) (27,411.28) (32,493.15) 9,748.10 4,656.64
National Deposit Scheme 0.05 (2.71) (0.13) (1.01) (0.71)
Khaas Deposit Scheme (6.99) (1.64) (3.84) (2.62) (0.26)
Special Savings Certificates(R) 13,800.57 128,469.03 61,856.60 43,960.21 (24,189.99)
Special Savings Certificates(B) (0.18) (8.53) (0.30) (0.74) (0.70)
Regular Income Certificates (273.53) 40,094.28 44,538.27 46,946.79 31,419.74
Bahbood Savings Certificates 38,799.69 78,537.96 59,267.18 61,731.56 38,128.51
Pensioners' Benefit Account 18,695.93 22,215.74 18,166.85 17,940.32 11,107.85
Savings Accounts 8,989.12 (10,899.15) 1,021.30 (625.30) 1,566.09
Special Savings Accounts 5,521.48 21,627.05 31,375.53 14,240.79 3,331.26
Mahana Amdani Accounts (24.97) (50.03) (195.73) (77.94) 61.62
Prize Bonds 8,277.07 14,649.97 38,556.68 41,083.40 41,314.32
National Savings Bonds - - 3,625.16 - -