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NSS witnesses Rs86.9bn outflow during 5MFY22

January 5, 2022 (MLN): Net savings mobilized under National Savings Schemes (NSS) remained negative as investors pulled out Rs86.9 billion on a net basis during Jul-Nov FY22, against an inflow of Rs27.98bn in the same period last year, Centra bank data showed on Wednesday.

The major reason behind the continuous outflow of investments under NSS was the restriction imposed on financial institutions to invest in NSS. 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.

To recall, during FY21, the NSS witnessed a huge outflow of Rs317.25bn, compared to the inflows of Rs370.9bn recorded in FY20, which was the second-highest annual mobilization achieved in the 17-year period.

According to SBP’s data, the outflow of investments from NSS in November alone amounted to Rs8bn against the influx of Rs3.14bn in the same month the previous year and the withdrawal of Rs6.8bn in Oct 2021.

During 5MFY22, most of the outflows were recorded in prize bonds (Rs67.7bn against an inflow of Rs27bn in 5MFY21) followed by special saving certificates (Rs18.2bn) and defense saving certificates (Rs3.9bn). While the regular income certificates were the only major source of inflows as they fetched Rs7bn investments during the period mentioned above.

In the month of November, major outflows were witnessed from prize bonds, other saving schemes and defense savings certificates with a drawdown amounting to Rs3.36bn, Rs3.19bn and Rs1.37bn, respectively. While regular income certificates attracted Rs527.4mn during the month.

Following the increase in policy rate, the government increased profits rates on all national savings schemes.

At present, the profit rate on pension and behbood accounts is 12.96%. while regular income certificates, defense savings certificates and special saving certificates are offering returns of 10.8%, 10.98%, and 10.6% respectively.

Copyright Mettis Link News

Posted on: 2022-01-05T23:43:35+05:00


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