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Pak Government intends to float fresh short-term National Saving Schemes

The government is considering introducing short-term National Savings Schemes (NSS) products for a year and below.

The government with the consent of finance experts in the Ministry of Finance was about to launch such a scheme last year for the benefit of small investors, but after finding some flaws in the said scheme, the government decided not to float the proposed NSS.

The NSS product maturities are across three to 10 years with profit rates ranging from 13.20 percent to 15.36 percent.

The federal government in a prelude announced Thursday that rates of return on already running NSS would remain unchanged. The recent introduction of IPS accounts – direct retail access to government securities – now indicates that there was intention to launch such new savings schemes.

The existing rates of return on NSS are 13.55 percent for Defence Savings Certificates, Regular Income Certificates 13.44 percent, Special Savings Certificates 13.33 percent and Savings Account are giving 9.0 percent to the investors.

The investor on Pensioner’s Benefit Account and Bahbood Savings Certificates for pensioners, widows and senior citizens are getting 15.36 percent on their investment. An expert on savings schemes said the introduction of shorter tenor NSS products would likely lead to deceleration in deposit growth at the margin and secondly some increase in higher funding costs for commercial banks.

He said from the macroeconomic perspective, it seems that its impact will have some positive result on deficit financing and tighter banking sector liquidity would likely to augur ill for private sector credit.

In case of floating fresh NSS programme, any impact is likely to be more obvious for the smaller banks, he added.

The bigger banks particularly National Bank of Pakistan currently announced dividend yield for CY 11 13 percent. The National Investment Trust in case of launching this fresh NSS would likely to announce dividend of Rs 3.75 per unit.


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