National Savings (Pakistan)

National Savings
Native name
مرکزی نظامت برائے قومی بچت
FormerlyNational Savings Bureau (1873), National Savings Organization (1972)
Company typeGovernment agency
IndustryFinancial services
Founded1873; 151 years ago (1873)
Headquarters
23-N, Savings House, G-6 Markaz, Islamabad
,
Pakistan
Key people
Hamid Raza Khalid, Director General
ProductsSavings and Investments
Websitesavings.gov.pk

The Central Directorate of National Savings (Urdu: مرکزی نظامت برائے قومی بچت) is Pakistan's state-owned savings bank, operating as an attached department under the Finance Division, Ministry of Finance led by the Director General.[1]

Traditionally, National Savings has focused on raising funds from individual savers to help finance the government's fiscal deficit through non-bank means. The organisation offers a range of savings products with competitive interest rates, backed by a 100% government guarantee on all deposits.

In recent years, National Savings has played a crucial role in promoting financial inclusion and is actively enhancing its customer services through digitisation. The centralisation of data has been a key achievement, and the institution is on the verge of introducing Alternative Delivery Channels for its customers. Account holders can now withdraw profits from savings schemes using UnionPay ATMs, eliminating the need to queue for monthly payments, thanks to the introduction of UnionPay debit cards linked to National Savings accounts.

History

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The history of the National Savings Organisation in Pakistan dates back to the British Raj when the Government Savings Bank Act, 1873 was promulgated.[2] During the First and Second World War, the British government used the then National Savings Bureau (NSB) to raise funds to meet war-related expenses.[3] After Pakistan acquired independence in 1947, the organisation continued to operate as NSB, before being renamed to Central Directorate of National Savings (CDNS) in 1953. In August 1960, the CDNS was given the status of an "Attached Department" of the Ministry of Finance and made responsible for all policy matters and execution of various National Savings Schemes (NSS). The present structure of CDNS was set up in early 1972 under the Ministry of Finance.[4]

In August 2019, the government decided to turn National Savings Organisation from a government agency into a corporation that will run under the government. Relevant legislation in this regard, Pakistan Savings Bill 2019, is prepared and being finalized.[5] The prize bond scheme was launched with a Prize Bond of Rs 100. The scheme has been expanded over time. Today we can find around six Prize Bonds including Rs 100, 200, 750, 1500, 25000 and Rs 40000.

Finances

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The organisation manages investments worth Rs. 4.04 trillion (US$14 billion) as of FY 2018-19;[6] an amount that is 25% of the country's net savings - making it the largest financial institution in Pakistan.[1] It has 7 million customers, of which 47% are female, leading it to become the financial institution that is closest to gender parity in the country.[7] The organisation sets the rate of interests based on the borrowing cost of government against wholesale debt instruments (Treasury Bills, Pakistan Investment Bonds).[8]

Operations

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National Savings organisational structure is based on directorates and branches. The Central Directorate, or headquarters, is located in G-6 Markaz, Islamabad. The organisation's regional directorates are located in Lahore, Gujranwala, Faisalabad, Karachi, Quetta, Hyderabad, Multan, Sukkur, Bahawalpur, Islamabad, Abbottabad, and Peshawar.[9] Under these regional directorates, there are 376 branches of National Savings Centres across the country.[1]

Investment

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Total investment in National Savings amounts to Rs3.4 trillion.[3]

Products

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The organisation offers several savings and investment products; including prize bonds, saving certificates, and saving accounts.

In July 2023, four National Savings products in the Sharia-compliant mode were launched.[10]

Most products are available to resident and non-resident Pakistanis, however, some products have restricted access and require specified criteria to be met before they are offered.[11]

These restricted access products are italicized in the following products list:

  • Prize Bonds
  • Premium Prize Bonds
  • Regular Income Certificates
  • Behbood Savings Certificates
  • Defence Savings Certificates
  • Special Savings Certificates
  • Short Term Savings Certificates
  • Pensioners Benefit Account
  • Shuhadas Family Welfare Account
  • Special Savings Account
  • Savings Account
  • Sarwa Islamic Term Accounts
  • Sarwa Islamic Savings Account

References

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  1. ^ a b c "About Us". Savings.gov.pk. 28 September 2019.
  2. ^ "The Government Savings Banks Act, 1873 (Act No. V of 1873)". nasirlawsite.com. Retrieved 28 September 2019.
  3. ^ a b Tirmizi, Farooq (13 December 2020). "Is National Savings the right investment vehicle for you?". Profit by Pakistan Today. Retrieved 14 December 2020.
  4. ^ Financial Stability Review 2009-10. State Bank of Pakistan. 2010. pp. 37–38.
  5. ^ Ansari, Irshad (3 August 2019). "Govt decides to turn CDNS into corporation". The Express Tribune. Retrieved 28 September 2019.
  6. ^ Pakistan Economic Survey 2018-19 (PDF). Ministry of Finance, Pakistan. 2019. pp. 148–49.
  7. ^ "Digitized National Savings Provides Financial Inclusion for More Pakistanis". World Bank. Retrieved 12 January 2020.
  8. ^ "Profit rates on savings schemes raised by up to 2.3 percent". www.thenews.com.pk. Retrieved 28 September 2019.
  9. ^ "Organogram". Savings.gov.pk. 28 September 2019.
  10. ^ Kiani, Khaleeq (27 June 2023). "National Savings floats Islamic products". DAWN.
  11. ^ "Products Summary". Savings.gov.pk. 28 September 2019.
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