KARACHI: The Central Directorate of National Savings (CDNS) will set up an Islamic window Rafa National Savings to handle the transactions of sharia-compliant saving products, an official said on Monday.
“Rafa National Savings will have a dedicated sharia board comprising of local and international scholars,” the official said. Government has already appointed a Dubai-based sharia advisory firm Dar Al Sharia to replicate Islamic financial model for the conventional national savings certificates.
The official said the ministry of finance hired the advisory and consultancy services provider to launch and sell sharia-compliant products from the proposed Islamic window. “Funds raised from sharia-compliant will be invested in project and development activities,” the official added.
CDNS, a leading investment with current portfolio of more than Rs3.5 trillion, helps the government raise fund for budgetary as well as infrastructure financing. Yet, banks and the central bank are the government’s primary sources of fund generation. Alone Islamic banking industry, which accounts for 11.6 percent market share, ended the last fiscal year with Rs2.04 trillion in assets.
Currently, the state-owned CDNS is finalising rules and governance structure for sharia-compliant products, which are gaining popularity in the country. But, the country’s savings-to-GDP ratio of 13.1 percent is still lowest in the region and there is need of a jab in the arm through attractive financial solutions to foster savings.
The official said sharia financial services “will aim to promote savings culture among public.” CDNS official penciled in early next year to introduce new products with maturity, starting from one year, and monthly profit. Investors can invest a minimum of Rs10,000 with no maximum investment limit, the officials said, sharing the details with The News last month.