CDNS collects Rs15bln in July on attractive profit rates

ISLAMABAD: The Central Directorate of National Savings (CDNS) has succeeded in achieving net collection target of Rs15 billion through its various investment certificates in the first month of the current fiscal year of 2019/20, as individuals are encouraged to park their funds into the saving instruments on attractive rates of returns, a senior official said on Friday.

The official told APP that the CDNS notified upward revision in profit rates for its various saving certificates with effect from July 1, 2019, “encouraging people to invest in various schemes of the directorate”.

“Upward revision would generate more revenues that could be utilised as budgetary support by the government to overcome budget deficit problems,” the official said.

The CDNS has set Rs350 billion as annual net target for the current fiscal year as compared to Rs324 billion in the previous fiscal year. The CDNS revised up savings target from Rs224 billion in FY2019.

The CDNS collected Rs410 billion in savings during the year ended June 30, 2019, more than double the collection of Rs155 billion in the fiscal year of 2017/18. The official said the directorate revised up and increased the gross savings target to Rs1.570 trillion for FY2020.

Total savings held by the CDNS stood at Rs1.150 trillion till June 30, 2019 as opposed to Rs774 billion a year ago. The directorate collected more savings than expected due to the rationalisation of CDNS certificates rates, the official added.

The CDNS has already increased rates on various saving certificates aimed at promoting saving culture in the country. Rates for defence saving certificate has been increased from 12.47 percent to 13.01 percent, while the rates of special saving certificate from 11.57 percent to 12.90 percent and regular income certificate from 12 percent to 12.96 percent.

Likewise, the rates of savings accounts have been increased from 8.5 percent to 10.25 percent, while the rates of Behbood saving certificates and pensioners benefit account were increased from 14.28 percent to 14.76 percent.

The official said the government also raised the rates on short-term (3 months), medium-term (6 months) and long-term (12 months) certificates to attract more people towards savings and investments. Rates for short-term certificates have been increased from 9.8 percent to 12.08 percent, medium-term from 9.88 percent to 12.18 percent, while the rates of long-term certificate have been enhanced from 9.98 percent to 12.28 percent.

The official said the instant upward revision in profit rates was made in the backdrop of current market scenario and in accordance with the government’s policy to provide market-based competitive rates of return to the investors of the national savings.

On a question, the official said the directorate has restricted the sale and purchase of prize bond of Rs40,000 and now the customers would cast the particular bond from any bank or convert it with any bond of the national savings, including defence savings and special savings certificates.