April 06, 2022 (MLN): The cumulative outflows from the National Savings Schemes (NSS) during the first eight months of the current fiscal year were recorded at Rs87.52 billion, mainly due to the restrictions imposed on financial institutions to invest in these schemes, Central bank data showed on Wednesday.

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.

Net savings mobilized under NSS during July-February 2021 also remained negative as investors pulled out Rs65.51bn.

To recall, during FY21, the NSS witnessed a huge outflow of Rs317.31bn, compared to the inflows of Rs370.92bn recorded in FY20, which was the second-highest annual mobilization achieved in the 17-year period.

During 8MFY22, most of the outflows were recorded in prize bonds i.e., Rs70.33bn against an outflow of Rs68.06bn in 8MFY21) followed by special saving certificates (Rs20.26bn), other saving schemes (Rs8.31bn) and defense saving certificates (Rs5.60bn). While the regular income certificates (RICs) were the only major source of inflows as they fetched Rs16.99bn investments during the period mentioned above.

According to SBP’s data, the month of February witnessed a net inflow of Rs9.53bn against the influx of Rs7.31bn in the previous month while savers withdrew Rs19.23bn in February 2021.

Outflows were only observed from special saving certificates with an amount of Rs1.45bn in February 2022. While other saving certificates and regular income certificates attracted Rs5.82mn and Rs3.67bn, respectively during the month.

On March 25, 2022, the government increased profits rates on almost all national savings schemes.

At present, the profit rate has been increased by 84bps to 11.04% per annum on RICs from 10.20%, while the rate on DSCs jumped from 10.32% to 10.92%, showing an increase of 60bps.

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