The Central Directorate of National Savings (CDNS) has achieved its net collection target of Rs. 15 billion in the first month of fiscal year 2019/20.
The amount was collected through various investment certificates as individuals were looking to park their funds into the saving instruments due to attractive rates of returns, a senior official said on Friday.
CDNS notified an 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. The upward revision would generate more revenues that could be utilized as budgetary support by the government to overcome budget deficit problems,” the official said.
Moreover, National Savings has set Rs. 350 billion as the annual net target for the current fiscal year as compared to Rs. 324 billion in the previous fiscal year. CDNS has increased its savings target from Rs. 224 billion in FY2019.
CDNS managed to collect Rs. 410 billion in savings for FY 2018-19, more than double the collection of Rs. 155 billion in the fiscal year of 2017/18. The official said the directorate increased the gross savings target to Rs. 1.570 trillion for FY2020.
Overall the total savings held by the CDNS stood at Rs. 1.150 trillion till June 30, 2019, as opposed to Rs. 774 billion a year ago. The directorate collected more savings than expected due to the rationalization of CDNS certificates rates.
The CDNS has already increased rates on various saving certificates aimed at promoting savings in the country. Rates for defense saving certificate has increased from 12.47 percent to 13.01 percent, while the rates of special saving certificate saw an increase from 11.57 percent to 12.90 percent and regular income certificate from 12 percent to 12.96 percent.
However, the rates of savings accounts have 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 increased 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 the long-term certificate have been enhanced from 9.98 percent to 12.28 percent.
According to the official, the instant upward revision in profit rates was made in the backdrop of the current market scenario and in accordance with the government’s policy to provide market-based competitive rates of return to the investors.