Islamabad, May 14, 2024 – The Central Directorate of National Savings (CDNS) has implemented adjustments to the interest rates on several significant savings schemes, with some witnessing reductions while others experience increases.
(more…)Tag: National Saving Schemes
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CDNS Adjusts Profit Rates of Saving Schemes for March 2024
Karachi, March 23, 2024 – The Central Directorate of National Savings (CDNS) has announced adjustments to the profit rates across various saving schemes, aiming to align them with prevailing economic trends and monetary policy objectives.
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Investment in Saving Certificates Drops by 12% in Pakistan
Karachi, March 11, 2024 – Pakistan has witnessed a substantial decline of 12 percent in investment in saving certificates during February 2024, compared to the same month a year ago, according to official statistics released by the State Bank of Pakistan (SBP).
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Pakistan Sharply Cuts Interest Rates on Saving Schemes
Karachi, December 20, 2023 – Pakistan has implemented substantial cuts to the interest rates on saving schemes, despite maintaining a higher benchmark policy rate.
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National Saving Schemes facilitation portal launched
KARACHI: The State Bank of Pakistan (SBP) has launched a portal in order to facilitate investors of national savings schemes.
The SBP highlighted that Special Savings Certificates (SSCs) with a (maturity period of three years) was launched on February 4, 1990 that offers a unique investment opportunity for small and medium savers to meet their periodic financial needs.
SSCs are available in the denominations of Rs. 500/-, Rs.1000/-, Rs. 5,000/-, Rs. 10,000/-, Rs. 50,000/-, Rs. 100,000/-, Rs. 500,000/-, and Rs. 1,000,000/-
Profit Payment Period
Profit is payable on the completion of each period of six months up to 3 years from their date of issuance.
Who Can Invest
All Pakistani Nationals as well as Foreign Nationals can purchase SSCs being a single adult, a minor or two adults jointly where the payments can be received either by the both jointly (Joint-A) or any one of the holders (Joint-B). An adult can also purchase SSCs on behalf of a single minor, two minors jointly or as a joint with a minor.
How to Purchase
SSCs can be purchased from any National Savings Centre (NSC), Pakistan Post Office (PPO) or authorized branch of a Scheduled Bank and the State Bank of Pakistan (SBP) by filling in the SC-1 (Application form). Documents Required with Application Form:
For Adult Pakistanis: Copy of CNIC,
For Overseas Pakistanis: Copy of NICOP or Pakistan Origin Card
For Minors: Copy of Form B or Child Registration Certificate Issued by NADRA,
For Foreign Individuals: Copy of Passport.
SSC can be purchased by depositing cash at the Issuing Office or by presenting a cheque/ draft/ pay-order. The Certificate shall be issued immediately against the cash payment. However, in the case of deposit through cheque/ draft/ pay-order, the Certificate shall be issued with effect from the date of realization of the cheque/ draft/ pay-order after receiving the clearance advice.
Minimum: Rs.500/-. No maximum investment limit.
SSCs are encashable at any time after the date of purchase. However, no profit is payable if the encashment is made before completion of six months. The Certificates issued/purchased/re-invested on or after November 15, 2010 shall not be re-invested on maturity.
Tax
Filers: 15% on profit earned/realized.
Non-Filers: 30% on profit earned/realized.
Zakat shall be collected at source as per rules.
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NSS: tax rate at 10% on profit subject to furnishing certificate
ISLAMABAD: Persons deriving profit less than Rs500,000 on national saving schemes are required to provide a certificate in order to get reduced income tax rate at 10 percent, official sources said.
Officials at Central Directorate of National Savings (CDNS) said that at present the rate of income tax on profit from national savings scheme is 15 percent. However, the rate shall be 10 percent in case annual profit is up to Rs500,000 if a person receiving the profit provide a certificate that his return on saving schemes shall not be above the threshold.
They said that the rate of tax shall be 15 percent in case the annual profit is above 15 percent if the profit is above Rs500,000 in the said schemes. However, the rate at 15 percent is available only to persons on the Active Taxpayers List (ATL). In other case where person is not on the ATL the tax rate shall be 30 percent.
The sources said that the CDNS had circulated information about the amendments to the Income Tax Ordinance, 2001 through a letter issued early this fiscal year to all zonal heads and other concerned stakeholders.
Through Finance Act, 2020, an amendment introduced to Section 151 of Income Tax Ordinance, 2001 which related to profit on debt.
Section 151 (1)(a) explained that yield on profit (profit on debt) on account, deposit or a certificate under the National Saving Schemes or Post Office Savings Account, the rate of tax shall be 10 percent of the gross yield/profit paid on amount up to Rs500,000.
The rate of tax exceeding Rs500,000 shall be 15 percent of the gross yield / profit paid. The rate of tax on persons not appearing in the ATL, the applicable tax rate is be increased by 100 percent.
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Banks directed to apply AML/CFT rules on issuance of saving certificates
KARACHI: State Bank of Pakistan (SBP) on Thursday directed banks to implement anti-money laundering (AML) and Counter Financing for Terrorism (CFT) rules related to issuance of National Saving Schemes (NSS).
The SBP said that commercial banks are performing functions of sale, encashment, profit payment etc. of various NSS such as prize bonds, SSC and DSC.
In this connection, your attention is invited towards National Savings Schemes (AML & CFT) Rules, 2019 promulgated by the Ministry of Finance, Government of Pakistan vide Notification No. F.No.16(1)GS-I/2019-98 dated January 23, 2020, sub-rule (3) of Rule 1 whereof reads as:
“These rules shall apply to all offices and persons responsible for the issuance, management, marketing, registration, replacement, sale and discharge of the instruments issued by and the accounts opened at and maintained with the National Savings Centers, Pakistan Post and any other office designated as offices of issue.”
In light of the cited rule, being the office of issue, the said Rules are also applicable on the commercial banks. Therefore, it is advised to ensure implementation of and compliance with the enclosed NSS (AML&CFT) Rules, 2019 and arrange for necessary dissemination to the concerned officials and branches, the SBP said.
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SBP asks banks not to accept institutional investment in saving schemes
KARACHI: State Bank of Pakistan (SBP) on Thursday informed banks about restriction imposed on institutional investment in saving schemes.
The central bank said that the Central Directorate of National Savings (CDNS) on July 01, 2020 restricted participation of institutional investors in national saving schemes.
In this connection, the SBP advised all authorized commercial banks to review the instructions contained in the above mentioned letters and ensure that no institutional investment of any kind should be accepted in National Savings Schemes (NSS) dealt by banks i.e. Special Savings Certificate (SSC) / Defence Savings Certificate (DSC) on or after July 01, 2020.
The SBP asked the banks to disseminate necessary instructions down the line to all authorized branches and concerned officials for information and strict compliance.
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Explaining source of income, annual income made mandatory for NSS investors
ISLAMABAD: The government has made mandatory for investors of National Saving Schemes (NSS) to explain source of income and annual income.
The government has notified National Savings Schemes (AML and CFT) Rules, 2019 in order to comply with recommendations of Financial Action Task Force (FATF).
Previously, the draft of rules was notified on December 19, 2019 for taking feedback from stakeholders.
Under the rules, the Central Directorate of National Savings (CDNS) or authorized third party will conduct Customer Due Diligence (CDD) and Know Your Client (KYC) of all existing and new investors of national saving schemes.
All the existing and new investors of national savings schemes have to provide information about source of income and annul income for making investment.
Following CDD measures will be taken-
(a) when establishing business relationship;
(b) while dealing with occasional customers and walk-in customers in line with sub-rule (i) of rule 4.
(c) in other situations and scenarios when there is suspicion of money laundering or financing of terrorism, regardless of threshold; and
(d) when there are doubts about the veracity or adequacy of previously obtained customer identification data.
The office of issue or third party shall identify the occasional customers and walk-in-customers and verify their identity using reliable, independent source of information, i.e. NADRA verification system (Verisys) or biometric identification system (Biosys).
Every customer, whether permanent or occasional and whether natural or legal person or legal arrangement, shall be identified for establishing business relationship and for the purpose following information shall be obtained, verified using reliable, independent source documents, data or information and recorded namely:
(a) full name as per identity or registration documents;
(b) national identity card, passport, national identity card for overseas Pakistanis, Pakistan origin card or alien registration card number, etc.
(c) registration or incorporation number of business, if applicable;
(d) residential address, telephone numbers and e-mail, if available;
(e) business address, telephone numbers and e-mail, if available;
(f) date of birth;
(g) date and place of registration or incorporation of business, if applicable;
(h) nationality
(i) place of birth;
(j) national tax number (NTN), if applicable;
(k) nature of business and location, if applicable;
(l) sources of earnings;
(m) customer’s net worth in respect of legal persons, legal arrangements and high risk customers; and
(n) annual income
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National Savings screening meant to stop ill-gotten money: Finance Division
ISLAMABAD: The Finance Division on Monday said that the screening of all saving schemes is meant to stop any ill-gotten money to become part of financial system and to safeguard the valued investors from the menace of Money Laundering and Terrorist Financing.
The Ministry of Finance, while clarifying news reports, said that Central Directorate of National Savings (CDNS) is committed to mitigating the deficiency to improve customer service delivery and to comply with the FATF recommendation to safeguard the investors’ interests.
Banks under the supervision of SBP have already put in place all the required systems and KYCs (Know Your Customers) processes to comply with the FATF recommendations.
In order to implement this requirement, Finance Division through promulgation of National Savings Schemes (AML-CFT) Rules, 2019 has decided to engage an AML-CFT compliant bank, through competitive bidding, to put in place the requirements as well as the necessary training of employees of National Savings.
Accordingly, Expression of Interest, in consultation with SBP, has been sought from the interested bank to conduct KYC and other requirement of new as well as existing clients of CDNS.
This will include the biometric verisys and screening of potential clients in UN Proscribed person List.
All these screenings are meant to stop any ill-gotten money to become part of financial system and to safeguard the valued investor from the menace of Money Laundering and Terrorist Financing.
Finance Division therefore reiterates that the steps of the Government are aimed at making the CDNS compliant with the FATF requirement and are not intended to jeopardize the interests of the account holders / customers.
Moreover, third-party arrangement will make the organization i.e CDNS more transparent and viable for the customers and will not in any case affect its financial business.