NSS witnesses huge outflow of investments during FY21

August 30, 2021 (MLN): The National Savings Schemes (NSS) witnessed a huge outflow of investments during FY21, clocking in at Rs317.25billion, compared to the inflows of Rs370.9billion recorded in the previous fiscal year, Central bank data showed on Monday.

To recall, on the recommendation of the State Bank of Pakistan, Finance Division directed financial institutions to discontinue investment in all National Savings Schemes with effect from July 1, 2020. However, the institutions were allowed to stay in the scheme till the maturity of their already made investments.

The purpose of imposing restriction on financial institutions was to dissuade them to use liquidity for the NSS products.

Following the issuance of the notification, the NSS witnessed an outflow of Rs149.5million compared to Rs72bn outflow in the same month of FY20. The massive outflow of investments during July FY21 was attributable to the maturity of products. However, during Aug-Nov FY21, the inflows under the NSS umbrella were positive and collectively accumulated Rs28.136bn for the scheme.

According to SBP’s data, the outflow of investments from NSS in the last month of FY21 (June’21) alone amounted to Rs123.78billion against the influx of Rs4.5billion in the same month previous year and the withdrawal of Rs92.9billion in May 2021.

During FY21, most of the outflows were recorded in Prize Bonds (Rs290.38billion against Rs159.8billion in FY20) followed by Defense Saving Certificates (Rs9billion) and Special Saving Certificates (Rs6.3billion). While the Regular Income Certificates witnessed an inflow of Rs26.72billion in FY21.

Copyright Mettis Link News