The Central Directorate of National Savings (CDNS) has announced a reduction in profit rates on several of its National Savings Schemes while maintaining the rates on others, according to a report by PressTonight
The profit rate for the Saving Account (SA) has been reduced by 150 basis points (bps), bringing it down to 19% from the previous rate of 20.5%. Similarly, the Short Term Saving Certificates (STSC) now offer a return of 17.9%, down by 134bps from the earlier 19.24%. The Sarwa Islamic Saving Account also saw a decrease, with the rate dropping to 19% following a reduction of 150bps.
These changes took effect on August 07, 2024, and have sparked discussions among investors and financial analysts. The CDNS, as Pakistan’s largest financial institution, plays a crucial role in managing a portfolio that exceeds Rs3.4 trillion, serving over 4 million customers across its 376 branches nationwide. The organization has been pivotal in generating funds for the government, which are essential for financing budgetary deficits and supporting critical infrastructure projects.
The revision in profit rates comes in the wake of the State Bank of Pakistan’s (SBP) recent monetary policy adjustment. Last month, the SBP’s Monetary Policy Committee (MPC) reduced the key policy rate by 100bps, bringing it down to 19.5%. This move was in response to a decrease in headline inflation, which stood at 11.1% year-on-year in July 2024, marking the lowest Consumer Price Index (CPI) figure since November 2021.
While some of the National Savings Schemes have seen reductions, other schemes have remained unaffected by the recent adjustments, offering stability to investors seeking consistent returns. The CDNS’s decision reflects the broader economic conditions and monetary policy shifts aimed at stabilizing Pakistan’s financial landscape.
