NSS witnesses Rs359bn outflows during FY22

September 6, 2022 (MLN): The cumulative outflows from the National Savings Schemes (NSS) in FY22 were recorded at Rs358.8 billion, mainly due to the restrictions imposed on financial institutions to invest in these schemes, Central bank data showed on Tuesday.

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 June 2022 alone, investors pulled out Rs62.9bn, compared to Rs59.8bn last month and Rs123.8bn in June 2021.

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 FY22, the highest outflows of Rs223.98bn and Rs69bn were observed in Other saving schemes and Prize bonds respectively, followed by Special saving certificates, Regular income certificates, and Defense saving certificates with an amount of Rs44.7bn, Rs10.56bn, and Rs10.4bn respectively.

In June 2022, most of the outflows were recorded in Regular income certificates (Rs31.97bn) followed by Other saving schemes (Rs25.6bn), Special saving certificates (Rs3.8bn), Defense saving certificates (Rs967.7mn), and Prize bonds (Rs454.8mn).

Meanwhile, it is pertinent to mention that amid higher policy rate and increase in cut-off yields of T-Bills, the Central Directorate of National Savings (CDNS) on August 7, 2022, increased profit rates on various savings schemes by 24-125 bps.

Accordingly, the profit rate has been increased on the Regular Income Savings Certificates by 24bps to 12.6% from 12.36% previously.

The rate of profit on a savings account was revised upwards by 125bps from 12.25% to 13.5%.

However, the profit rate on Pensioners, Behbood (Welfare) and Special Saving Certificate remained unchanged at 14.16%, 14.16% and 13% respectively.

Moreover, the rate of return on Defence Saving Certificates also remained unchanged at 12.4%.

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