Project on National Savings Organization

Executive Summary

The history of National Savings Organization dates back to the year 1873 when the Government Savings Bank Act, 1873 was promulgated. During the first world war, the British Government introduced several Schemes for collection of funds to meet the expenditure. It was in this context that the Post Office Cash Certificates and, during the second world war, Post Office Defence Savings Certificates were floated. The need to setup a separate agency was felt and a National Savings Bureau was established in 1943- 44 as an attached department of the Ministry of Finance of the undivided Government of India. The department was headed by National Savings Commissioner with the status of a Joint Secretary. At that time the main functions of the Savings Department were to initiate all policy matters and issue directives for the execution of policy decisions of the Central Government, and to review the Savings Schemes from time to time. Gradually, Savings Organization were established in almost all the Provinces of the sub-continent with the objective of popularizing the Savings Schemes among the masses as well as to supervise, guide and control the working of authorized agents under their jurisdiction. The agents, who were appointed by the local authorities. They were paid commission @ 2 1/2 on the investment secured by them. These authorized agents were in those days the only agency for securing investment in terms of Savings Certificates from the general public. In nutshell the central agency viz. National Savings Bureau, Simla, was mainly concerned with the policy and planning matters of the Savings Schemes whereas the responsibility of execution of various Savings Schemes vested with Provincial authorities .

At the time of Independence there was no time for any sort of innovations in the field of administration. Thus an organization with the name of 'Pakistan savings Central Bureau' was created and the Savings work was entrusted to it by the Government of Pakistan, but this Bureau had its own peculiarities. The Pakistan Savings Central Bureau had no independent entity and was not given the same status as enjoyed by Savings Bureau, Simla. The head of the Pakistan Savings Central Bureau was then called Central National Savings Officer, a Junior Officer of the Ministry of Finance with the status of an Under Secretary to the Government of Pakistan. He was assisted by a Superintendent having some auxiliary staff. In 1953, the Pakistan Savings Control Bureau was re-named as Central Directorate of National Savings and it carried out the functions on the lines of National Savings Bureau Simla but as a part and parcel of the Finance Division, Central Directorate of National Savings was only responsible for publicity, and the operative agents were the Provincial Governments as well as Pakistan post Offices. However, the entire expenditure in this regard was borne by the Central Government. Such an arrangement created a large number of administrative difficulties and stunted the growth of savings. In view of these difficulties the Central Directorate of National Savings was given the status of an Attached Department in September, 1960, and was made responsible for all policy matters and execution of various National Savings Schemes.

Subsequently, it was also declared a Technical Department by the Government. The Director General, National Savings (BPS-20) now enjoys full powers of a Head of the Department.

Till December, 1971, the National Savings Organization functioned as a Publicity organization and its activities were merely promotional in nature. But in early 1972, the scope of its activities was enlarged as the Central Directorate started selling II-Rupee Prize Bonds, and subsequently engaged in the operations of other savings schemes. This resulted in considerable expansion of the National Savings Organization.

At present, this Organization has a total sanctioned strength of 3377 employees in various grades and its main component units are as under:

Central Directorate of National Savings, Islamabad.
Directorate of Inspection and Accounts, Islamabad.
Training Institute of National Savings, Islamabad alongwith a sub-Training Institute at Karachi.
12 Regional Directorates (located at Peshawar, Abbottabad, Rawalpindi, Gujranwala, Lahore, Faisalabad, Multan, Bahawalpur, Sukkur, Hyderabad, Karachi, Quetta)
367 National Savings Centres spread throughout the country.

Table of Contents

Title Page……………………………………………………………………………………………………………. 1
Executive Summary……………………………………………………………………………………………. 2
Acknowledgement……………………………………………………………………………………………… 4
Permission Letter………………………………………………………………………………………………. 5
Contents with Page Number……………………………………………………………………………… 6
Management Structure……………………………………………………………………………………. 7
Message from the Director General…………………………………………………………………. 8
Field of Activity & Service………………………………………………………………………………… 9
1. Certificates…………………………………………………………………………………………. 10
  1. Defense Savings Certificates……………………………………………………. 10
  2. Special Savings Certificates…………………………………………………….. 13
  3. Regular Income Certificates……………………………………………………. 16
  4. Bahbood Savings Certificates…………………………………………………. 19
2. Accounts……………………………………………………………………………………………. 22
  1. Savings Account…………………………………………………………………….. 22
  2. Special Savings Account…………………………………………………………. 25
  3. Pensioners' Benefit Account…………………………………………………… 28
3. Prize Bonds………………………………………………………………………………………… 31
Current Scenarios
1. Investment in National savings scheme……………………………………………… 33
2. outstanding deposits………………………………………………………………………… 37
Documents attached…………………………………………………………………………………….. 38
References……………………………………………………………………………………………………. 41

Management Structure

	Message


	Mr. Zafar M. Shaikh
	Director General
	National Savings Organization

It is a matter of great honor for me that I have been entrusted with the responsibility of National importance of transforming the organization into an autonomous and dynamic corporation fully capable to achieve the goals of serving our investors best. The Central Directorate of National Savings is a key player in domestic debt management arena which is manifested by its portfolio of over Rs. One trillion with an extensive outreach to over 6 million valued investors who park their life long savings in the schemes offered by NSS.

It goes without saying that rapid development in the financial sector in the country over the years has besides setting high standards of excellence has made it incumbent upon us to bring about immediate reforms in our functioning so as to meet the challenges posed by the competitive environment . To achieve that end I would like to see the organization adopting a new approach of working by providing better services to our valuable investors, extending our outreach to more countrymen in land and abroad, introducing new investment products and advanced working facilities. This would go a long way in building up an unbreakable relationship with our valuable investors.

To achieve the above objectives I would look forward of having cooperation from all my staff members who are rendering commendable services to the organization since long. I would like to introduce effective training programs to enhance their efficiency and to provide all the possible support in the discharge of their duties.

Field of Activity & Services

The NSC provides the following Two types of services:

CERTIFICATES

ACCOUNTS

CERTIFICATES

Defense Savings Certificates:

The Government of Pakistan introduced Defence Savings Certificate scheme in the year 1966. The scheme has specifically been designed to meet the future requirements of the depositors. This is the only scheme having 10 years' maturity with built in feature of automatic reinvestment after the maturity. These certificates are available in the denominations of Rs.500, Rs.1000, Rs.5,000, Rs.10,000, Rs.50,000, Rs.100,000, Rs.500,000 and Rs.1,000,000/=.

Who Can Invest?

These certificates can be purchased by a single adult, a minor, two adults in their joint names with the options of payable to the holders jointly (Joint-A ) or payable to either (Joint-B). An adult can also purchase these certificates on behalf of a single minor, two minors jointly or himself/herself and a minor jointly. In addition to above individual investors, the following institutions are also allowed to invest in the scheme:

Registered Charities (Non-profit bodies).
Public Sector Enterprises excluding Banks.
Private Educational & Health Institutions.
Employees Old Age Benefit Institutions (EOBIs).
Private Corporate Sector registered with the SECP excluding Banks.
Non-Bank Financial Institutions (NBFIs) excluding Insurance Companies.

How To Purchase?

These certificates can be purchased from any National Savings Centre (NSC), Pakistan Post Offices (PPO), Scheduled Bank branches and State Bank of Pakistan (SBP) by filling in a prescribed form called SC-1, which is available at all the above offices of issue free of cost. A copy of the National Identity Card or in case of a foreign national, a copy of the Passport is required to be attached with the application form. To download application form in editable Adobe Acrobat format, please click here.

Mode of Deposit.
These certificates can be purchased by depositing cash at the issuing office or by presenting a cheque. The certificates shall immediately be issued on receipt of cash. However, in case of deposit through cheque the certificates shall be issued from the date of realization of the cheque after receipt of the clearance advice.

What Is The Investment Limit.
The minimum investment limit is Rs.500/-, however, there is no maximum limit of investment in this scheme.

What about Redemption.

These certificates are encashable at par any time after one month from the date of purchase. However, no profit is payable if encashment is made before completion of one year.

What is the return?

In this scheme the profit is paid on maturity or encashment for completed years. Every Rs.100,000/- will become Rs.107,000/-, Rs.116,000/-, Rs.126,000/-, Rs.138,000/-, Rs.151,000/-, Rs.166,000/-, Rs.184,000/-, Rs.206,000/-, Rs.232,000/- and Rs.263,000/- on completion of 1, 2, 3, 4, 5, 6, 7, 8, 9 and 10 years, respectively. These rates are effective from 23rd June, 2007. The average compound rate of return on maturity presently works to 10.15% p.a.

Tax & Zakat Status.

At present, the profit earned is exempt from withholding tax, if the total investment in the scheme by the investor(s) does not exceed Rs.150,000/-. However, withholding tax @ 10% is deductible at source on the profit(s) earned if the total investment exceeds Rs.150,000/- by the investor(s). The Zakat is collected at source as per rules.

Special Savings Certificates (Registered)

Keeping in view the periodic needs of depositors, this three years' maturity scheme was introduced in February, 1990. These certificates are available in the denomination of Rs.500, Rs.1000, Rs.5,000, Rs.10,000, Rs.50,000, Rs.100,000, Rs.500,000 and Rs.1,000,000/=. Profit is paid on the completion of each period of six months.

Who Can Invest

These certificates can be purchased by a single adult, a minor, two adults in their joint names with the options of payable to the holders jointly (Joint-A ) or payable to either (Joint-B). An adult can also purchase these certificates on behalf of a single minor, two minors jointly or himself/herself and a minor jointly. In addition to the above individual investors, the following institutions can also invest in the scheme:

Registered Charities (Non-profit bodies).
Public Sector Enterprises excluding Banks.
Private Educational & Health Institutions.
Employees Old Age Benefit Institutions (EOBIs).
Private Corporate Sector registered with the SECP excluding Banks.
Non-Bank Financial Institutions (NBFIs) excluding Insurance Companies.

How To Purchase.

These certificates can be purchased from any National Savings Centre (NSC), Pakistan Post Office (PPO), Scheduled Bank branches and the offices of State Bank of Pakistan (SBP) by filling in a prescribed form called SC-1, which is available at all the above offices of issue free of cost. A copy of the National Identity Card or in case of a foreign national, a copy of the Passport is required to be attached with the application form.

Mode of Deposit

These certificates can be purchased by depositing cash at the issuing office or by presenting a cheque. The certificates shall immediately be issued on receipt of cash. However, in case of deposit through cheque the certificates shall be issued from the date of realization of the cheque after receipt of the clearance advice.

What Is The Investment Limit

The minimum investment limit is Rs.500/-, however, there is no maximum limit of investment in the scheme.

What About Redemption

These certificates are encashable at par any time after one month from the date of purchase. However, no profit is payable if the encashment is made before completion of six months.

What Will I Get As Profit

At prevailing rates, the profit is paid @ 9.00% p.a. for 1st five profits and @ 10.50% p.a. for the last profit. However, if the profit is not withdrawn on due date it will automatically stand reinvested and would be calculated for further profit on completion of the next 06 months' period.

Tax & Zakat Status

Regular Income Certificates

Keeping in view the monthly requirements of the general public, this five years' maturity scheme was launched on 2nd February, 1993. These certificates are available in the denomination of Rs.50,000, Rs.100,000, Rs.500,000, Rs.1,000,000, Rs.5,000,000 & Rs.10,000,000/=. Profit is paid on monthly basis reckoned from the date of issue of certificates.

Who Can Invest .

These certificates can be purchased by a single adult, a minor or two adults in their joint names with the options of payable to the holders jointly (Joint-A ) or payable to either (Joint-B). An adult can also purchase these certificates on behalf of a single minor, two minors jointly or himself/herself and a minor jointly. In addition to above individual investors, the following institutions are also allowed to invest in the scheme:

Registered Charities (Non-profit bodies).
Public Sector Enterprises excluding Banks.
Private Educational & Health Institutions.
Employees Old Age Benefit Institutions (EOBIs).
Private Corporate Sector registered with the SECP excluding Banks.
Non-Bank Financial Institutions (NBFIs) excluding Insurance Companies.

How To Purchase.

These certificates can be purchased from any National Savings Centre (NSCs) or from Pakistan Post Office (PPO) by filling in a prescribed form called SC-1, which is available at all the above offices of issue free of cost. A copy of the National Identity Card or in case of a foreign national, a copy of the Passport may be attached with the application form (SC-I). To download application form in editable Adobe Acrobat format, please click here.

Mode of Deposit.
These certificates can be purchased by depositing cash at the issuing office or by presenting a cheque. The certificates shall immediately be issued on receipt of cash. However, in case of deposit through cheque the certificates shall be issued from the date of realization of the cheque after receipt of the clearance advice.
What Is The Investment Limit.
The minimum investment limit is Rs.50,000/-, however, there is no maximum limit of investment in this scheme.

What About Redemption.

These certificates are encashable any time subject to deduction of service charges at the following rates:

If encashed before completion of one year from the date of issue.	@ 2.00% of the face value
If encashed after one year but before completion of 02 years from the date of issue.	@ 1.50% of the face value
If encashed after two years but before completion of 03 years from the date of issue.	@ 1.00% of the face value
If encashed after three years but before completion of 04 years from the date of issue.	@ 0.50% of the face value

What is the return.

At the prevailing rates monthly profit of Rs.795/- is paid on investment of each Rs.100,000/-. This way the profit rate works to 9.54% p.a. However, the facility of automatic reinvestment of profit to earn further profit is not available in this scheme.

Tax & Zakat Status.

The profit earned on these certificates is subject of deduction of 10% withholding tax at source. However, the investment made in this scheme is exempt from collection of Zakat.

Bahbood Savings Certificates

Keeping in view the hardships faced by the widows and senior citizens and to guard them against the declining rate of return on National Savings Schemes, this ten years' maturity scheme was launched by the Government on 1st July, 2003. Initially the scheme was meant for widows only, however, the Govt. later decided to extended the facility for senior citizens aged 60 years and above with effect from 1st January, 2004. These certificates are available in the denominations of Rs.5,000/-, Rs.10,000/-, Rs.50,000/-, Rs.100,000/-, Rs.500,000 and Rs.1,000,000/-. Profit is paid on monthly basis reckoned from the date of purchase of the certificates.

Who Can Invest .

Only widows and senior citizens aged 60 years and above are eligible to invest.

How To Purchase.

These certificates can only be purchased from the National Savings Centre (NSCs) by filling in a prescribed form called SC-1, which is available at the offices of issue free of cost. A copy of the National Identity Card and necessary evidence regarding eligibility is required to be attached with the application form. To download application form in editable Adobe Acrobat format, please click here.

Mode of Deposit.
The certificates can be purchased by depositing cash at the issuing office or by presenting a cheque. The certificates shall immediately be issued on receipt of cash. However, in case of deposit through cheque the certificates shall have the effect from the date of realization of the cheque after receipt of the clearance advice.
What Is The Investment Limit.
The minimum investment limit in this scheme is Rs.5,000/-, whereas, the maximum limit is Rs.3,000,000/-. Investment in allowed in multiple of Rs.1,000/-.

What About Redemption

.The certificates can be encashed any time after issuance subject to deduction of service charges at the following rates:

if encashed before completion of one year from the date of purchase.	@ 1.00% of the face value
if encashed after one year but before completion of 02 years from the date of purchase.	@ 0.75% of the face value
if encashed after two years but before completion of 03 years from the date of purchase.	@ 0.50% of the face value
if encashed after three years but before completion of 04 years from the date of purchase.	@ 0.25% of the face value
if encashed after completion of 04 years	No service charges

What is the return..

At the prevailing rates monthly profit of Rs.970/- is paid on investment of each Rs.100,000/-. This way the profit rate works to 11.64% p.a. Automatic reinvestment of profit facility to earn further profit is not admissible in this scheme at the scheme's rate; however, further profit is paid on undrawn profit at the rate applicable on Savings Account.

Tax & Zakat Status.

The withholding tax is not collected on the profit earned on these certificates. The investment made in this scheme is also exempt from Zakat.

ACCOUNTS

Savings Account

This is the oldest scheme among the National Savings instruments. The scheme has been designed to encourage the small savers and to meet their day to day needs. This is an ordinary account and frequent withdrawals ( twice a week) can be made through this account.

Who Can Invest .

The account can be opened by a single adult, a minor, two adults in their joint names with the options of payable to the holders jointly (Joint-A ) or payable to either (Joint-B). An adult can also invest in these account on behalf of a single minor, two minors jointly or himself/herself and a minor jointly. In addition to above individual investors, the following institutions are also allowed to invest in the scheme:

Registered Charities (Non-profit bodies).
Public Sector Enterprises excluding Banks.
Private Educational & Health Institutions.
Employees Old Age Benefit Institutions (EOBIs).
Private Corporate Sector registered with the SECP excluding Banks.
Non-Bank Financial Institutions (NBFIs) excluding Insurance Companies.

How To Invest.

These account can be opened at any National Savings Centre (NSCs) and Pakistan Post Office (PPO) by filling in a prescribed form called DA-1, which is available at all the above offices of issue free of cost. A copy of the National Identity Card or in case of a foreign national, a copy of the Passport may be attached with the application form. To download application form in editable Adobe Acrobat format, please click here.

Mode of Deposit.

The accounts can be opened by depositing cash at the issuing office or by presenting a cheque. The passbook and withdrawal slip shall immediately be issued on receipts of cash. However, in case of deposit through cheque the account shall be opened from the date of realization of the cheque after receipt of the clearance advice.

What Is The Investment Limit.

The minimum investment limit is Rs.100/- in the scheme besides no maximum limit. However, only one account can be opened by person at an office of issue.

What About Encashment .

The deposits can be withdrawn any time from the date of deposit. However, there is a limit of two withdrawals within a week's time.

What is the Return.

Profit in this account is credited on 30th June every year and is worked out on the lowest balance of an account between the close of the sixth day and end of the month. The current rate of profit is 6.50% p.a.

Tax & Zakat Status.

At present the profit earned on the accounts, wherein the average balances within a month do not exceed the limit of Rs.150,000/- are exempt from levy of withholding tax. However, withholding tax @10% is deductible at source on the profits earned on the accounts, wherein the balances exceed the aforesaid limit. Zakat is also applicable as per rules.

Special Savings Account

A three years maturity scheme introduced in February, 1990. The deposits are maintained in form of an account. Profit is paid on the completion of each period of six months.

Who Can Invest .

Registered Charities (Non-profit bodies).
Public Sector Enterprises excluding Banks.
Private Educational & Health Institutions.
Employees Old Age Benefit Institutions (EOBIs).
Private Corporate Sector registered with the SECP excluding Banks.
Non-Bank Financial Institutions (NBFIs) excluding Insurance Companies.

How To Invest.

These accounts can be opened at any National Savings Centre (NSCs) and Pakistan Post Office (PPO) by filling in a prescribed form called DA-1, which is available at all the above offices of issue free of cost. A copy of the National Identity Card or in case of a foreign national, a copy of the Passport may be attached with the application form. To download application form in editable Adobe Acrobat format, please click here.

Mode of Deposit.
The accounts can be opened by depositing cash at the issuing office or by presenting a cheque. The passbook and withdrawal slip shall immediately be issued on receipts of cash. However, in case of deposit through cheque the account shall be opened from the date of realization of the cheque after receipt of the clearance advice.

What Is The Investment Limit.
The minimum investment limit in this scheme is Rs.500/-. There is not maximum limit, however, the deposits are required to be made in multiple of Rs.500/-.

When Can I Encash My Certificates.

The deposits can be withdrawn at par any time after one month from the date of purchase. However, no profit is payable in case the withdrawals are made before completion of 6 months.

What Will I Get As Profit.

At the prevailing rates the profit is paid @ 9.00% p.a. for 1st five profits and the last profit @ 10.50% p.a. However, if the profit is not withdrawn on due date, it will automatically stand reinvested and would be calculated for further profit on completion of the next 06 months period.

Tax & Zakat Status.

Pensioners' Benefit Account

Keeping in view the hardships faced by the pensioners and to guard them against the declining rate of return on National Savings Schemes, this ten years' maturity scheme was launched by the Government on 19th January, 2003. The deposits are maintained in the form of accounts and the profit is paid on monthly basis reckoned from the date of opening of the account.

Who Can Invest .

The pensioners of Federal Government, Provincial Governments, Government of Azad Jammu & Kashmir, Armed Forces, Semi Government and Autonomous bodies are allowed to invest.

How To Purchase.

These accounts can only be opened at the National Savings Centre (NSCs) by filling in a prescribed form called DA-1, which is available at the offices of issue free of cost. A copy of the National Identity Card and the copy of Pension Payment Order may be attached with the application form.

Mode of Deposit.
The account can be opened by depositing cash at the issuing office or by presenting a cheque. The account shall immediately be opened on receipt of cash. However, in case of deposit through cheque the account shall be opened with effect from the date of realization of the cheque after receipt of the clearance advice.

What Is The Investment Limit.
The minimum investment limit is Rs.10,000/-, whereas, the maximum limit is Rs.3,000,000/-. If an investor has already opened an account, he is eligible to invest only two subsequent deposits in that account.

What About Encashment.

The deposits can be withdrawn any time after date of deposit subject to deduction of service charges at the following rates:

if withdrawn before completion of one year from the date of deposit.	@ 1.00% of the face value
if withdrawn after one year but before completion of 02 years from the date of deposit.	@ 0.75% of the face value
if withdrawn after two years but before completion of 03 years from the date of deposit.	@ 0.50% of the face value
if withdrawn after three years but before completion of 04 years from the date of deposit.	@ 0.25% of the face value

What Will I Get As Profit.

At the prevailing rates monthly profit of Rs.970/- is paid on investment of each Rs.100,000/-. This way the profit rate works to 11.64% p.a. Automatic reinvestment of profit facility to earn further profit at the scheme's rate is not admissible in this scheme; however, further profit is paid on undrawn profit at the rate applicable on Savings Account.

Tax & Zakat Status.

The withholding tax is not collected on the profit earned on the deposits made in this scheme. The investment made in the scheme is also exempt from Zakat.