June 06, 2022 (MLN): The cumulative outflows from the National Savings Schemes (NSS) in 10MFY22 were recorded at Rs236 billion, mainly due to the restrictions imposed on financial institutions to invest in these schemes, Central bank data showed on Monday.
Moreover, registration requirements for prize bonds of higher denominations and strict implementation of anti-money laundering laws and know-your-customer (KYC) conditions have also had a negative impact on fund mobilization.
In the month of April 2022 alone, investors pulled out Rs149.64bn, the highest outflow recorded in the fiscal year. On the other hand, in April 2021, only Rs14.26bn was recorded in terms of the net outflow of savings.
To recall, during FY21, the NSS witnessed a huge outflow of Rs317.31bn, compared to the inflows of Rs370.9bn recorded in FY20, which was the second-highest annual mobilization achieved in the 17-year period.
During 10MFY22, the outflows were observed from defense saving certificates, special saving certificates, prize bonds, and other saving certificates with an amount of Rs8.8bn, Rs30.28bn, Rs69.59bn, and Rs149.94bn, respectively. On the other hand, regular income certificates attracted Rs22.63bn.
In April 2022, most of the outflows were recorded in prize bonds i.e., Rs7.67bn against an outflow of Rs4.62bn in 10MFY21) followed by defense saving certificates (Rs2.08bn), and other saving schemes (Rs143.3bn). While the regular income certificates (RICs) and Prize Bonds were the only major source of inflows as they fetched Rs2.82bn and Rs670.6 million in investments during the month.
It is pertinent to mention that amid higher policy rate and the recent increase in cut-off yields of T-Bills, the Central Directorate of National Savings (CDNS) on June 06, 2022, increased profit rates on almost all national savings schemes.
Accordingly, the profit rate has been increased by 36bps to 12.36% per annum on Regular Income Certificates (RICs) while the deposit rate on savings accounts jumped by 1.5% to 12.25% from 10.75%.
Moreover, special saving certificates have their profit rose by around 60bps to 13% from 12.40%.
However, the profit rate on behbood, pension, and shudda family remained unchanged at 14.16%.
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