National Savings issues clarification for profit rates of saving certificates

This is with reference to the news published in Pakistan Today on 16 August 2018 with a punch line of “Profit rates of different saving certificates revised”.

The publishing of the news is highly appreciated however the same is a bit out of context and not properly informed. To be precise with information and as it should be, hence this clarification.

The profit rates on NSS are reviewed bi-monthly and last been upward revised from 1 July 2018. As per policy, the next revision is due from 1 September, which will be based on the post monetary policy dated 27 July 2018 rate regime. However, even the existing rates on NSS are still competitive and comparative with the profit rates on different products offered by financial institutions. Further, the rates of PBA, BSC and Shuhuda Welfare account are much higher than the comparative market products.

With respect to National Savings performance, some important and critical achievements are missing in the story with regard to savings mobilization and drastic improvement in services delivery to the valued customers. It is worthwhile mentioning that the savings mobilization is not the sole responsibility of National Savings. The National Savings Schemes (“NSS”) targets are divided between, National Savings, Commercial Banks/ State Bank of Pakistan (“SBP”) and Pakistan Post Office Department (“PPOD”), and these annual targets are set and advised to all concerned.

CDNS has achieved all its assigned targets during the years despite low-interest rates regime. The achievement of CDNS alone in terms of net savings mobilization remained 110 per cent, 103 per cent and 178 per cent of the targets during FY 2015-16, 2016- 17, 2017-18, respectively, and helped to increase the overall NSS portfolio to Rs3.6 trillion. However, the negative net flow on the part of Commercial Banks of Rs-4 billion, Rs-12 billion and Rs-13 billion in FY 2015-16, 5016-17 and 2017-18, respectively, actually affected the overall mobilization of NSS. It is also pertinent to mention that the gross receipts during last three years of lowest interest rate regime increased substantially by Rs926 billion, Rs1007 billion and Rs1,368 billion during FY 2015-16, 2016-17 and 2017-18, respectively.

CDNS alone contributed Rs2, 070 billion during these three years. Furthermore, and perhaps most importantly, CDNS leap-frogged in last two years in digitizing the department to divorce its dependence on interest rates and complete digital transformation is only a matter of months – something which had been struggling for the last 15 years, and won first-ever the “Outstanding Contribution to Financial Inclusion Pakistan Award 2017 by CFI.co Magazine” and “Best Financial Inclusion Pakistan Award 2018 by International Finance Magazine”. Besides, following outlined key achievement were totally ignored/missed in the story: Secured the membership of Banking Clearing System (NIFT); the only non-banking member. Intracity cheque clearing improved from 5 days to 1 day and intercity from 15 days to 3 days. Allowed third-party payments from savings account which helped in converting them into operating accounts.

Offering Call Center and Computerized Complaint Resolution System for better customer experience. Successfully launched “Qoumi Bachat Digital” – the mobile App of National Savings. In-house staff mobile App developed and is being rolled out. Website revamped to make it more customer friendly and state-of-the-art Number of automated branches increased from merely 48 in August 2016 to now 223 (68 per cent of the data) with 195 online (previously, non-online). Most efficient deployment of IT infrastructure and expensive equipment by setting-up of Data Center at NTC and connecting it online with CDNS branches.

Organizational structure improved for better control environment and service delivery. Implementation (and institutionalization) of Dormant Account Rules in line with global best practices. Better communication with the employees and team building (newsletter introduced, cricket tournaments, essay-writing competition, whatsapp groups rolled-out, employee town-halls initiated) and with the customers (complaint channels opened on Call Centre, Facebook, WhatsApp, Twitter, etc.). Secured funding grant of 2.5 million from Karandaaz for offering Alternate Delivery Channels “ADCs” including online banking (cellphone and internet) and ATM/ POS Cards. World Bank extended $9.4 million under their Financial Inclusion and Infrastructure Project program for Pakistan for upgrading IT systems and processes, conversion to a double-accounting system, ERP, etc. Final Phase/ Phase 3 of branch automation is pursued with NFIS/ DFID. Expected to secure US $5mn grant from DFID through NFIS. Automation Project Phase 2 has been successfully completed in-time (September 2017). Rolled-out new welfare products for Shuhada Families and Disabled Persons, and first-ever Registered Prize Bond launched after a gap of 7 years. Advanced stages of launching much-needed Shariah Compliant Product and Overseas Pakistanis Savings Certificates which will enable us to at least double our investment potential. Offering of ADCs will also help in increasing the potential for investment manifold.