Authorities have detected cases of major fraud in the National Savings scheme where officials have allegedly stolen around Rs 200 million by diverting funds to their own accounts.
National Savings, the public sector organization, is valued at Rs 3.6 billion and deals with as many as 7 million small-to-medium individual savers.
Major Fraud at National Savings
The recent case of fraud at National Savings first came to the surface at the Lahore branch when 10-year saving certificates matured. It was found that officials there diverted over Rs 110 million to their own bank accounts and their family members. Efforts were underway to withdraw another Rs 100 million when the issue came to light.
According to Nadeem Iqbal, the Director of Human Resources of the Central Directorate of National Savings (CDNS), this is the biggest fraud in the history of National Savings. He added that only three fraud cases have been discovered in the organization so far over the past 15 to 16 years.
He further told media that most of the funds that were withdrawn illegally have been recovered. He said that his department has handed over the case to the Federal Investigation Agency (FIA). Also, plans have been made to conduct a special audit of the entire record at National Savings in order to eliminate any possibility of similar cases going undetected.
“At the same time, remedial measures like strengthening of systems and automation are in process to avoid a repeat in future because the National Savings is generally not prone to crime or corruption, but customers mostly belonging to poor and lower middle class could be subjected to fraud for their innocence,” he said.
Discrepancies Found in System
According to a few officials, initial reports stated that around 1200 SC-1 forms (which are used to acquire saving certificates) of Special Saving Certificates and Regular Income Certificates were missing.
While investigating the missing forms, the authorities found some serious irregularities when checked against computerized records. Upon checking the manual record of NS-8, the blank certificates, which were also maintained within the system, authorities found discrepancies in the data kept with the system and that maintained manually.
In one case dating back to July 2017, manual records of NS-8 were showing 71 pieces of Regular Income Certificates of Rs. 1 million denomination in use. However, the computerized system showed that 74 pieces were in use. Up to 3 certificates were unaccounted for.
Moreover, computerized records showed the issuance of three Rs.1 million denomination pieces to a different registration number and their status was appearing as ‘encashed’. However, no such entry could be found in the records which were entered manually.
Many other discrepancies were found in the system and the manual records regarding the SC-1 forms.