Daily Times

The Central Directorate of National Savings (CDNS) has reduced the profit rates on several of its National Savings Schemes while keeping others unchanged, a local media outlet reported on Monday.

Rates of Saving Account (SA) decreased by 150 basis points (bps) to 19% from 20.5%. The Short Term Saving Certificates (STSC) will offer a return of 17.9% return, as compared to 19.24% earlier, a decrease of 134bps.

Similarly, the rate on Sarwa Islamic Saving Account declined to 19% after a decrease of 150bps.

Meanwhile, the rate of other schemes remained unchanged.

The change in the rates of return took effect from August 7, 2024.

The National Savings Organization is Pakistan’s largest financial institution, managing a portfolio exceeding Rs3.4 trillion and serving over 4 million customers through an extensive network of 376 branches across the country, administered by 12 Regional Directorates.

The CDNS has been instrumental in generating funds for the government, helping to finance budgetary deficits and support critical infrastructure projects.

Last month, the Monetary Policy Committee (MPC) of the State Bank of Pakistan (SBP) reduced the key policy rate by 100 basis points, taking it to 19.5%, its second successive decision of a cut.

It may be noted that Pakistan’s headline inflation clocked in at 11.1% on a year-on-year basis in July 2024, lower than the reading in June 2024 when it stood at 12.6%.

This was the lowest CPI figure since November 2021 when it stood at 11.5%, shows data available with the Pakistan Bureau of Statistics (PBS).

Meanwhile, the Central Directorate of National Savings (CDNS) has indicated to surpass the target set in Islamic finance in the current Fiscal years 2024-24.

The Central Directorate of National Savings (CDNS) has set a target of Rs 170 billion investment in Islamic finance for the Current Fiscal Year, which will lead to growth in the Islamic economy in the country, the senior official of CDNS told APP here on Monday.

The National Savings had issued the Islamic bonds for the promotion of the Islamic finance system, which will help the development of the Islamic economy in the country, he said.

Replying to a question, he said the CDNS had achieved the target of Rs 75 billion during the last fiscal year (2023-24) from the Islamic bonds, and that was why it aimed to introduce new dimensions in the Islamic finance sector.

“Islamic finance now has a significant role in the global financial sector. A large part of the economy of many major countries currently includes Islamic finance,” he added.

The official said that work was being done on institutional reforms in the CDNS.

Given the current market trend in the country, an ambitious target had been set to improve the savings culture further, he added.

Replying to another question, he said that the CDNS has set an annual target of Rs 1650 billion for the current Fiscal Year, 2024-25, which will promote the saving culture in the country.

He said that the CDNS has realized a target of Rs1.742 trillion in fresh bonds and exceeded 100 percent of the annual target in the last fiscal year 2023-24, from July 1 to June 30th.

The National Savings has set an annual target of Rs 1.7 trillion for the year 2023-24; it is encouraging that this year, “We surpassed the 100 percent of the annual target.”

The CDNS surpassed the annual target and achieved the target of Rs 1.6 trillion in fresh bonds in the previous fiscal year 2022-23, he said.

He said this was an Rs 200 billion additional annual target than the target of Rs 1300 billion for the previous financial year 2021-22.

The CDNS has set a reviewed saving target of Rs 1.4 trillion for the financial year (2021-22) which will promote savings culture in the country, he said, adding that given the current market trend in the country the ambitious target had been set to improve the savings culture further.