ISLAMABAD, April 24: The government may soon announce an increase in yields on all national savings schemes by offering one per cent more on investments.
Sources said here on Monday that the government had accepted in principle a proposal of the Central Directorate of National Savings to allow one per cent increase in profit on all savings instruments.
The proposal was made to the ministry of finance after increase in rates of Karachi Interbank Offered Rate (Kibor), Treasury Bills, Pakistan Investment Bonds (PIBs) and other secondary market instruments.
The new saving rates were to be announced on January 1 this year but were delayed. The interest rate policy is supposed to be reviewed bi-annually.
The sources said that the directorate needed to function in line with market forces, adding that it would face investment problems if it did not offer higher profits to investors.
At present, various national savings schemes offered investors eight to nine per cent profits, which many government officials believe needed to be revised upward to promote domestic investment.
Meanwhile, Prime Minister Shaukat Aziz has approved the conversion of CDNS into a corporation, working under a proposed eight-member autonomous board. The federal cabinet is expected to approve the new corporation shortly.
The sources said that the CDNS, whose portfolio increased from Rs80 billion to over Rs1 trillion with over four million clients, would enjoy a considerable financial autonomy after becoming Pakistan Savings. The government, the sources said, had also agreed to let the corporation enter the mutual fund business, adding that the government would initially provide equity for the business.
