Clarification

Apropos a news item "New Savings Scheme" carried by Business Recorder on 1st July 2011. The Central Directorate of National Savings endorses the viewpoint that the Government is already paying 12-14 percent return on treasury bills to commercial banks who have been earning huge profits on government borrowings without any effort and hence new savings schemes by National Savings would be financially beneficial for the ordinary people without putting any additional burden on the treasury.
On the other hand, this directorate considers it contrary to the facts and figures that the borrowing from national savings is highly expensive. In fact National Savings Schemes are the most cost-effective among the government borrowings due to their features like Service charges and pre-encashment option. On the other hand, Senior citizens, widows and pensioners are getting high rate of profit on schemes like Behbood Saving Certificate and Pensioner Benefit Account to meet their necessities keeping in view the high inflation and low bank deposit rates.
"This is worthwhile to mention that the total debt stock of NSCs was Rs 19.55 billions in 1984-85 which has been increased to PKR 1,874 billions in 2010-11 and the land mark was achieved with the same human resource strength, limited resources and manual working. Specially, during the last four years of financial crunch the total deposits mobilised by National Savings Schemes were Rs 803 billions. In view of the above it would not be true to say that the CDNS is not capable to achieve the target for Short Term Scheme in future. The National Saving Organisation is highly optimistic to mobilise the expected target of 100 billions for short term schemes in FY 2011-12 with the same spirit as the target for the FY 2010-11 was also achieved despite all the constraints," the clarification concludes.