INTERNSHIP REPORT

ON

NATIONAL SAVINGS ORGANIZATION

PESHAWAR

SUBMITTED BY:
JAVERIA
Class No. 14
SESSION 2021-2023
MPA (FINANCE)

INSTITUE OF MANAGEMENT STUDIES UNIVERSITY OF PESAWARKHYBER PAKHTONKHWA,

PAKISTAN
FEBRURY, 2024

1
 INTERNSHIP REPORT

ON

NATIONAL SAVINGS ORGANIZATION

PESHAWAR

SUBMITTED BY:
JAVERIA
Class No. 14
MPA (FINANCE)

SESSION 2021-2023

An internship report submitted to the Institute of Studies, University of Peshawar, in partial fulfillment of the requirements for the
degree of

INSTITUE OF MANAGEMENT STUDIES

UNIVERSITY OF PESAWAR
FEBRURY, 2024

2
 INTERNSHIP REPORT

ON

NATIONAL SAVINGS ORGANIZATION

INTERNAL SUPERVISOR

Signature:

Name: Ms. Afifa Anjum Khattak

Designation: Lecturer

EXTERNAL SUPERVISOR

Signature:

Name:

Designation:

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 ACKNOWLEDGEMENT
All praise to Almighty Allah, the most merciful and kind. Indeed, his favors give me a chance to complete this internship
report well in time. I am grateful to many people who either directly or indirectly helped me during my internship. It was a new
experience, exciting and challenging and indeed their frequent cooperation was worth enough to be remembered. My special thanks to
MS AFIFA ANJUM KHATTAK (my supervisor) for her guidance and support during internship report writing. During the
completion of the report there was not a single person but a number of people whose cooperation, help and guidance enabled me to make
my way through the turbulence, waves of confusion, scarcity of technical as well as financial resources. Apart, I must be thankful to MR
SHAFI ULLAH (Regional Director of National Savings) whose guidance made me confident enough to initiate my
report with high aspiration.

JAVERIA

EXECTIVE SUMMARY
National Savings Organization being the major contributor in country's domestic sources of borrowings alone contributes to
significant level of 18%.Therefore in this report, to ascertain the significance of this organization a little discussion is made on debt,
its management and its implications if made excessive. Debt is an important source of financing that all governments use to varying
degrees. Governments employ debt financing to finance development expenditure or to address fiscal imbalances from time to time.
Debt may not have a universal predictable impact on economic growth. The link between debt and economic growth is dependent
upon the size, cost and use of debt.

Pakistan's sovereign debt has grown rapidly since 1990s. Borrowing trends have changed overtime. Prior to the mid-1980s debt was
used to finance public sector investment in important areas such as infrastructure, agriculture, power and water sectors etc. After the
mid-1980s, public debt was also used to finance non-development expenditure. Growing debt has exacerbated debt servicing and its
proportion as a percentage of government revenues has been on the rise.

Pakistan's economy has grown in spurts but sustainable and consistent growth hare remained elusive. Key constraints include low
exports, mismanagement of public sector enterprises, inflation, persistent fiscal deficits, high defense expenditure and more recently,

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insufficient power.

It is difficult to establish the link between growth and debt in Pakistan with certainty. The key reason is that a substantial part of
Pakistan's economy is undocumented. Estimates place the size of the undocumented/shadow economy at the same size or larger than the
documented GDP. This implies that Pakistan's real debt to GDP ratio may be much lower. Similarly, the response of the
undocumented economy to deficits, borrowing, future tax liabilities etc. are not as streamlined as in advanced economies. However,
persuasive evidence indicates that Pakistan's debt is negatively correlated to economic growth.

Perpetually increasing debt and lower capacity to service debt is a credible risk to Pakistan's economy and the Government's budget.
Pakistan needs to streamline its debt management, employ debt to generate economic activity, and improve its revenue collection to
ensure that debt does not become a significant bottleneck to economic growth.

Savings play an important role in the development of a country. It is the primary source of capital formation of a country. It is just
like a "backbone" to a national economy. Saving is the excess of income over consumption expenditure. It helps to control Inflation
and the most importantly it reduces and ultimately eliminates dependence on economic aid and make the economy self-relined and
self-support.

The objective of the report is to highlight the role of the National Saving Organization in mobilizing savings in the country and its
importance for economic development. Various problems which the National Saving Organization is facing while playing its vital role.
Information was obtained from various sources which is used in the analysis along with some input from personal observation.

Findings of the report reveal that the role of National Saving Organization is very crucial in the promotion of savings in Pakistan.
Furthermore, the role can be made more effective and efficient by addressing the problem in a proper way and the
recommendations presented here may benefit the organization if implemented in letter and spirit.

In order to mobilize savings, National Savings offers three types of products to its customers namely:

⦁ Certificates

⦁ Accounts

⦁ Prize Bonds

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 TABLE OF CONTENTS
CHAPTER 1
1.1 Background of study 9
1.2 Purpose of the Study: 9
1.3 Methodology: 3
1.4 Place and Period of Internship Report: 10
1.5 Limitation of the Internship Report: 10
CHAPTER 2
Overview of the Organization 11
2.1 Brief History 5
2.3 INTRODUCTION OF THE ORGANIZATION................................................11
2.4. POLICY OF THE
ORGANIZATION...........................................................................11
2.4.1 Financial Inclusion:............................................................11
2.4.2 Security and Reliability:............................................................11
2.4.3 Diversification of Savings Products:..............................................................12
2.4.4 Government Financing:............................................................16
2.4.5. Innovation and Adaptability:...............................................................16
2.4.6 Customer Education and Awareness:..............................................................16
2.4.7 Compliance and Transparency:.............................................................16
2.4.8 Ethical and Responsible Financial Practices:.............................................................16
2.5 COMPETETORS............................................................................17
2.6 ORGANIZATIONAL STRUCTURE:...............................................................17
2.6.1 ORGANOGRAM NATIONAL SAVING ORGANIATION.......................................................17
2.6.2 NUMBER OF EMPLYEES...............................................................18
2.6.3 MAIN OFFICE.....................................................................................18
2.6.4 INTRODUCTION OF ALL THE DEPARTMENTS.....................................................
2.6.5 CPMMENTS OF THE ORGANIZATIONAL STRUCTURE.................................................18
CHAPTER-3
INTERNSHIP TRAINING AND OBSERVATIONS ACCORDING TO WEEKS:
3.1. What I Learned.....................................................................19
3.2. Salient Features of Individual Schemes (NSS)..............................................................19
3.3. Defense Savings Certificates (DSC)
3.4. Special Savings Certificates/Accounts (SSC/R)..............................................................21
3.5. Regular income certificates (RIC)..............................................................21
3.6. Behbood Savings Certificates (BSC)..............................................................21

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3.7. Savings Accounts (SA)..............................................................22
3.8. Special Savings Accounts (SSA)..............................................................22
3.9. Pensioners Benefit Accounts (PBA)...............................................................22
3.10. Prize Bonds (PB)..............................................................23
3.11. Sharia Based Products............................................................24
3.12 Overall Experience.............................................................25
CHAPTER 4
Significance of CDNS in Mobilizing Private Savings & Analysis
i. Avenues for Investment for Household or Private Savings.....................................................26
ii.Savings Instruments of CDNS.............................................................26
iii. Share of Various Savings Schemes.............................................................26
iv. Rates of Return on NSS..............................................................27
iii. Share of Various Savings Schemes.............................................................27
Significance of NSS in Deficit Financing and Raising Government Debt..........................................30
i. NSS and Deficit Financing v. Performance of NSS............................................................30
iii. NSS and Liquidity Management..............................................................................32

CHAPTER 5
CONCLUSION AND RECOMMENDATIONS
5.1 CONCLUSION.........................................................................................34
5.2. RECOMMENDATIONS....................................................................................35

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 LIST OF ACRONYMS

CDNS Central Directorate of National Savings

RDNS Regional Directorate of National Savings
NSC National Savings Centre
DIA Director, Inspection & Accounts
ZIAO Zonal Inspection & Accounts offices
RAO Regional Account Office
DSC Defense Saving Certificate
SSC® Special Savings Certificate (Registered)
SSA Special Savings Accounts
RIC Regular Income Certificate
PBA Pensioners' Benefit Account
BSC Behbood Savings Certificate
SA Savings Account
SIA Sarwa Islamic Account
MAA Mahana Amdani Accounts
ANSO Assistant National Savings Office
JNSO Junior National Savings Officer

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 CHAPTER 1

INTRODUCTION TO THE REPORT

1.1 BACKGROUND OF STUDY

The role of savings in a developing country like Pakistan needs hardly an emphasis. Effective mobilized savings constitute a strong
factor for capital formation. With a low per capital income, the capacity of the people to save is obviously limited. The pattern A our
socio-economic life is characterized by traditional conservatism and sometime with orthodox set of value which does not
generate a tendency to postpone immediate requirement for future benefits. Capital formation in the domestic sector is therefore very
low. Savings in the private sector are not only desirable for capital formation but highly instrumental in curtailing inflationary
tendencies generated by the process of rapid economic development. In such a situation, the general price level goes on increasing, and
unless the supply of money is checked by definite and effective savings, the inflationary tendencies and rising prices may
endanger the very basis of the country's economic viability.

National Savings works in the name of the Central Directorate of National Savings. It is an attached department of the Ministry of
Finance. It has its presence all over Pakistan in form of Regional Directorates, National Savings Centers, Zonal Inspection and Audit
Offices (ZIAOs) and Regional Accounts Offices. It administers National Savings Schemes on behalf of Government of Pakistan. It
raises the most cost-effective debts from general public for budgetary support to the Government of Pakistan. CDNS has a
portfolio of over Rs. 3.4 trillion. These funds are raised from individuals, pensioners and households through offering government
securities at retail level. It also assists the government in policy formulation regarding promoting and inculcating thrift among the
masses and provides safe investment avenues to individuals to park their savings in a way that will also help in reducing inflation.

A research report "Role of Government in Promo tine Sainte's CDNS" has been published in Financial Stability Review 2009-10 SBP
in which the role of CDNS has been critically analyzed. The report has suggested that CDNS may be restructured in such a way that
it can play its vital role of savings mobilization without creating substantial distortions in the financial sector. In the year 2020, whole
Pakistan was connected Core Business Application. The whole 376 branches were computerized and were online which helped in bringing
the whole network of branches across Pakistan on a single platform.

The debate on whether public debt is good or bad for an economy goes on. Some economists claim that debt is negatively related to
economic growth, while others argue that the two are positively correlated. Some contend that no relationship exists between debt
and economic growth. There is, however, a general consensus among most economists that debt is an important source of financing
and could have a positive effect on the economy. Raising Public debt through a variety of short and long term instruments is an

9
essential government activity in almost all developing and advanced economies. Governments borrow to finance both physical and
social infrastructure and resolve fiscal imbalances, with a view to accelerate economic growth.

1.2. PURPOSE OF STUDY

The objectives for which internee carried out this study were;

 To examine and evaluate the role and performance of CDNS in savings mobilization In Pakistan. 

To identify the problems regarding savings' mobilization faced by CDNS.

 To suggest ways to cater the mobilization needs effectively of CDNS

 To give recommendations CDNS

1.3. METHODOLOGY

During course of study, the research methodology adopted was secondary data collection through various sources such as reports,
manuals, journals, newspapers, Internet, and Primary data collection through personal observation, customer trends and senior
management / Staff etc.

1.4. PLACE AND PERIOND OF INTERNSHIP

I did internship as per requirement of my MPA Degree in National Savings, Regional Office, Peshawar and one week at their branch
located in University Town near NBP on Chinar Road.

1.5. LIMITATION OF INTERNSHIP REPORT

The following limitation which internee has faced in preparation of this report

 Due to the busy schedules of Management, Section officers and Regional head, complete information about the National
Savings could not be obtained, however utmost efforts and cooperation was extended by them.

 8 weeks' time was very limited to cover this attached department.

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 CHAPTER 2
OVERVIEW OF THE ORGANIZATION

2.1 BRIEF HISTORY

The National Savings Organization has a rich history dating back to 1873, established under the Government Savings Bank Act.
Initially utilized for funding war-related expenditures during World Wars I and II, it evolved over time to institutionalize a savings
culture in Pakistan. In 1943-1944, the National Savings Bureau was established to oversee policy matters and execute various
National Savings Schemes (NSS). The pivotal year 1972 marked the organization's responsibility for all policy matters and the
execution of NSS.

2.3 INTRODUCTION OF THE ORGANIZATION

The National Savings Organization stands as a cornerstone in Pakistan's financial landscape, embodying a legacy of over 140 years.
Established in 1873 under the Government Savings Bank Act, the organization has evolved into the country's largest financial
institution, managing a substantial portfolio exceeding Rs. 3.4 trillion and serving more than 04 million valued customers. Its
extensive reach is facilitated through a nationwide network of 376 branches, strategically administered by 12 Regional Directorates.

Historically rooted, the organization's origins lie in the British Government's utilization of the savings channel during World Wars I
and II to meet war-related expenditures. Post-independence in 1947, the National Savings Organization continued to operate in
various forms, eventually being revitalized in September 1960 as an Attached Department of the Ministry of Finance. The pivotal
year 1972 marked a transformative moment, granting the organization responsibility for all policy matters and the execution of
National Savings Schemes (NSS).

Beyond its historical significance, the National Savings Organization has played a pivotal role in promoting a savings culture within the
nation. It has not only successfully cultivated a financial savings ethos but has also emerged as a vital source of funds for the
government. As the custodian of the nation's savings, the organization has contributed significantly to financing budgetary deficits and
essential infrastructure projects.

The post-independence era witnessed the establishment of a separate agency, the National Savings Bureau, in 1943-44, with a focus
on initiating policy matters and issuing directives for the execution of policy decisions by the Central Government. This marked the
beginning of the organization's spread across provinces, aiming to popularize Savings Schemes among the masses. The
operational responsibilities rested with authorized agents appointed by local authorities.

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In the years following independence, the organizational structure underwent transformative changes. The 'Pakistan Savings Central
Bureau' was created to oversee savings work, later re-named the Central Directorate of National Savings in 1953. However,
administrative challenges persisted, leading to the organization attaining the status of an Attached Department in September 1960,
ultimately evolving into a Technical Department.

Presently, the National Savings Organization operates under the leadership of Mr. Hamid Raza Khalid, the Director General at BPS-
21, and maintains a sanctioned strength of 3977 employees across various grades. With a commitment to financial inclusion,
innovation, and service excellence, the National Savings Organization continues to shape Pakistan's financial landscape, contributing
significantly to the nation's economic development.

2.4 POLICY OF THE ORGANIZATION

The National Savings Organization operates under a comprehensive policy framework that guides its operations, objectives, and
commitment to the financial well-being of the nation. This policy is rooted in the organization's historical legacy, commitment to
promoting a savings culture, and its crucial role as a custodian of the nation's savings. The key elements of the policy include:

2.4.1 Financial Inclusion:

The National Savings Organization is committed to fostering financial inclusion by providing accessible and inclusive savings
opportunities to all segments of society. The organization aims to cater to the diverse financial needs of individuals, encouraging a
broad spectrum of the population to participate in various National Savings Schemes.

2.4.2 Security and Reliability:

Ensuring the security and reliability of investments is a fundamental aspect of the organization's policy. All National Savings Schemes
are backed by the guarantee of the Government of Pakistan, instilling confidence among investors regarding the safety of their
deposits.

2.4.3 Diversification of Savings Products:

To meet the diverse financial objectives of investors, the organization maintains a range of savings products under both conventional
and Islamic categories. This diversity allows individuals to choose schemes that align with their financial goals, risk tolerance, and
religious preferences.

2.4.4 Government Financing:

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A significant aspect of the policy involves contributing to government financing. The National Savings Organization plays a vital role in
generating funds to address the budgetary deficit and support essential infrastructure projects. By mobilizing savings from the
public, the organization serves as a key financial intermediary for government funding needs.

2.4.5 Innovation and Adaptability:

The policy promotes a culture of innovation and adaptability to meet the evolving needs of the financial landscape. The organization
continuously reviews and updates its savings products and policies to align with changing economic conditions, market dynamics, and
investor preferences.

2.4.6 Customer Education and Awareness:

In line with its commitment to promoting a savings culture, the National Savings Organization prioritizes customer education and
awareness. The organization aims to empower investors with the necessary knowledge to make informed decisions, understand the
benefits of savings, and navigate the various National Savings Schemes effectively.

2.4.7 Compliance and Transparency:

The organization adheres to a policy framework that emphasizes compliance with regulatory standards and transparency in its
operations. Regular audits, stringent governance practices, and open communication with stakeholders are integral components of this
commitment.

2.4.8 Ethical and Responsible Financial Practices:

Operating under a code of ethics, the National Savings Organization ensures responsible financial practices. The organization places a
premium on integrity, honesty, and accountability in all interactions with customers, stakeholders, and the public.

Through this comprehensive policy framework, the National Savings Organization continues to play a pivotal role in shaping
Pakistan's financial landscape, contributing to the economic well-being of the nation and fostering a culture of financial prudence and
security among its citizens.

2.5 COMPETETORS

The National Savings Organization faces a dynamic landscape with several competitors across the financial sector in Pakistan. Chief

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among them are commercial banks, offering a wide array of financial products such as savings accounts and fixed deposits, directly
competing for the attention of potential investors. Additionally, Islamic banks, adhering to Sharia-compliant financial principles,
provide an alternative to the National Savings Organization's Islamic savings products. Private investment companies entice individuals
seeking diverse investment opportunities, while insurance companies present indirect competition by offering savings and investment-
linked products. Government securities and bonds emerge as competitors, particularly for investors seeking stable, fixed-income
options. Mutual fund companies, providing professionally managed portfolios, pose a competitive challenge for those seeking
diversified investment avenues. The rise of digital and fintech platforms introduces a modern dimension to the competition, catering
to individuals looking for convenient, online savings and investment solutions. Furthermore, global financial institutions and
multinational banks operating in Pakistan contribute to the competitive landscape, making the sector dynamic and diverse. This
multifaceted competitive environment underscores the importance for the National Savings Organization to continually innovate and
adapt to maintain its position in the market.

2.6 ORGANIZATIONAL STRUCTURE:

2.6.1 ORGANOGRAM NATIONAL SAVING ORGANIATION

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2.6.2 NUMBER OF EMPLYEES

With a sanctioned strength of 3977 employees in various grades, the CDNS faces challenges in staffing to meet the needs of its vast
reach and a portfolio of over Rs. 3.4 trillion. Approximately 40% of the current workforce is nearing retirement.

2.6.3 MAIN OFFICE

The main office of the National Savings Organization (CDNS) is located in Islamabad, Pakistan. The Central Directorate of National
Savings (CDNS) typically has its main administrative office in the capital city, overseeing and coordinating the operations of the
organization across the country.

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2.6.4 INTRODUCTION OF ALL THE DEPARTMENTS

 Administration Department: Responsible for overseeing general administrative functions, human resources, and day-to-
day operations.

 Finance Department: Manages financial planning, budgeting, accounting, and financial reporting.

 Operations Department: Handles the core operational functions related to National Savings Schemes, customer
interactions, and transaction processing.

 Marketing and Public Relations Department: Develops and implements marketing strategies to promote National Savings
Schemes and manages public relations initiatives.

 IT Department: Manages information technology infrastructure, software applications, and ensures the security and
efficiency of digital systems.

 Compliance and Risk Management Department: Ensures compliance with regulatory requirements, manages risks, and
implements measures to safeguard the organization.

 Customer Service Department: Focuses on providing excellent customer service, addressing queries, and ensuring
customer satisfaction.

 Investment Department: Manages investment portfolios, assesses market trends, and makes strategic investment decisions.

 Legal Department: Provides legal counsel, ensures compliance with laws and regulations, and handles legal matters.

 Audit Department: Conducts internal audits to assess the organization's financial and operational processes for compliance
and efficiency.

2.6.5 CPMMENTS OF THE ORGANIZATIONAL STRUCTURE

The organizational structure of the National Savings Organization exhibits several commendable features that contribute to its
effectiveness and operational success:

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 Hierarchical Clarity:

The presence of a Central Directorate at the apex indicates a clear and well-defined hierarchy, essential for streamlined
decision-making and policy formulation. This clarity promotes organizational coherence and ensures a unified direction.

 Regional Focus:

The decentralized structure, featuring Regional Directorates and Zonal Inspection and Accounts Offices, reflects a
strategic emphasis on regional adaptation. This approach allows the organization to effectively cater to diverse regional
needs and manage operations across geographically dispersed areas.

 Training and Development Emphasis:

The inclusion of dedicated Training Institutes underscores a strong commitment to employee skill development and capacity
building. Integrating training with organizational operations demonstrates a forward-thinking approach to navigate the
complexities of the dynamic financial environment.

 Financial Oversight:

The presence of Inspection and Accounts Offices at both central and zonal levels highlights a robust framework for
financial oversight, audits, and compliance. This emphasis is fundamental for maintaining trust, transparency, and integrity
within the financial institution.

 Operational Units:

The existence of National Savings Treasuries, Sub-Treasuries, and Centers signifies a well-defined structure for managing
financial instruments and delivering services to customers. These operational units play a crucial role in contributing to the
organization's overarching financial goals.

 Integration of Training and Operations:

The strategic integration of training institutes within the organizational structure showcases a proactive approach to

17
 aligning employee development with operational needs. This ensures that staff is adequately equipped to handle their
responsibilities effectively.

 Customer-Centric Approach:

The widespread presence of National Savings Centers demonstrates a customer-centric focus, enhancing accessibility for
individuals across the country. This approach facilitates engagement with National Savings products and services at the
grassroots level.

 Efficiency and Coordination:

The tiered structure with central and regional units suggests a well-balanced approach between centralized decision-making and
regional autonomy. This organizational design aims to achieve operational efficiency and effective coordination, critical for a large
financial institution.

 Strategic Alignment:

The structure appears aligned with the organization's strategic goals, ensuring that various units contribute cohesively to the
overarching mission of promoting savings and supporting government financing initiatives.

 Adaptability and Flexibility:

The multi-tiered structure's flexibility allows for adaptability to regional variations and responsiveness to dynamic financial
market conditions. This adaptability is crucial for maintaining relevance and effectiveness in a rapidly changing economic
landscape.

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 CHAPTER-3
INTERNSHIP TRAINING AND OBSERVATIONS ACCORDING TO WEEKS:

3.1. What I Learned

Week 1:

I gained practical experience in public dealing and all other allied working i.e. dealing with accounts, certificates and
calculation of profit (though these are now calculated by CBA software), remittances, deposits, balancing etc. of the Centre. I learned how
to communicate with customers properly and provide information and fill in forms for savings schemes and opening Accounts. I issued
savings certificates and processed cheque book cases of the customers. I opened accounts of the customers. Being compliant with all the
prevailing laws and regulations, CDNS has focused on getting personal information of the customer (Name, CNIC, Address,
Educational info) and financial information (Source of Income-SOI). These are required by the AML Act, 2010 and AML-
CFT Regulations, 2020. The information is populated in CBA system through KYC (Know Your Customer) form. Customer Due
Diligence (CDD) is also conducted. I did all those for customers

Week-2

Then I moved to regional office and start my internship there at initially at Product Development & Management Section
to get exposure to managing the data, the cases related to loss of certificate cases, reporting the NSS Data to quarter concerned .I
also learnt how a complaint either from Mohtasib or Prime Minister portal received via their CMS is processed and replied without
any paper. The replies are submitted on the portal and information are disseminated to all concerned in real time. I handled some
direct complaints of the customer with regard to various issues including loss of certificate cases, Death cases and denial of services.

Week-3

During 3rd week of my stay at National Savings I spent time in admin section thereby communication with Regional
director and other senior officers with regard to service matters, recruitment process and some administrative matters. I learnt how
a letter or case is processed in offices and moved from one desk to another in proper hierarchy. The File work is learnt as PUC
(paper Under Consideration) was how supposed to be processed and resultantly note sheet on file (the sacred document) in offices
are recorded every one remarks in proper order with exact dates and signatures. Leave cases, retirement cases, and various
advances that is HBA, Conveyance or GP Fund advances are sanctioned under certain financial powers as per delegation of power
by the head of department.

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Week-4

During this week I spent times in Budget section of the organization and had an excellent exposure with Section officer
Budget .In short words the budget officer is also known as DDO (Drawing & Disbursing officer).The section was mainly responsible
for timely submission of budget estimates to CDNS and then ministry of Finance .At the same section I learnt how a contingent
claim of either field (that is branch) or Directorate (that is RDNS) is entertained .It was learnt that initially we had to check proper
head of account ,then funds(budget) under the relevant head and authenticity of claims to be scrutinized then had to be sanctioned as
per the delegation of powers.

Week-5

During 5th week I was assigned the duties to learn the process of treasury operations and managing liquidity at branches and
throughout the region. How Government's Account 1(nonfood) is debited and payments to various claims of customers are made in cash or
through Government cheque drawn on State Bank of Pakistan in main cities (like Peshawar & DI Khan) wherein SBP Banking
Services Corporations are available.

The branch remittances and withdrawals are recorded and reconciled on monthly basis with in National Savings
organization. On the other hand NST (National Savings Treasury) also reconciles data with SBP, Federal Treasury (known as Govt
Treasury) of all the receipts (withdrawals from SBP) and deposits (remittances) into SBP on periodical basis. Treasury operations are
the essence of my whole stay at National Savings organization.

WEEK-6:

During the said period I had the opportunity to spend time at Regional Accounts office (RAO) wherein all financial claims
are processed and own cheque called as NS cheque and RAO Cheques are issued which are only acceptable at National Savings. In
this regard it is worth mentioning that National Savings is Federal Govt Organization of it unique nature like foreign office wherein
Departmentalized accounts are meantime with no as such involvement fo country's main Accountant general office .The RAO
Cheques are issued after pre audit of the claims .During processing three things are taken care of, first is Voucher, second is fund's
availability and the last one is sanction of the competent authority. RAO basically serves National savings on behalf of AGPR in the
department. Their Job is Pre Audit and for post Audit there is constitutional body Auditor General of Pakistan available who later
on do audit on periodical basis. This office in itself is an interesting one and of unique nature due to its various and multi-tasking.
From managing an independent office ,their budgetary control and over all ensuring compliance to prudential regulations.

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Week-7:

This was the 2nd last week of the hectic and very rigorous training process of National Savings during which I was
assigned the task to be at Audit &Inspection Office (ZIAO) wherein the post audit & Inspection is carried out through their Audit
officers in two regions i.e. Peshawar and Abbottabad .In other word ZIAO Covers Whole KPK,AJK ,GB and some part of Punjab
including Attok Districts ,thus a total of 70 auditable units through their controlling officer BS-20 and the audit officer. A unique
method of surveillance onsite is surprise visits of head of audit and their inspecting officers according to certain mandate and
TORSs. There are two kinds of audit reports, one is detailed/Regular audit report and the other is Surprise visit report .The audit
reports thus submitted if have any violation or irregularity is taken up with the regional Directorate at the zone level and correct
rive measures are adopted immediately or whatever the observation suits. The whole setup is a watch dog type of activity and
ensuring control and compliance to the relevant rules and procedure. I worked on an audit report ,also conducted a surprise visit to
NSC University Town branch wherein I started my Internship. Counted their heavy cash which was unique kind of experience and
exposure. Over all conducting a detailed audit & Inspection is somewhat a very laborious and hectic job.

Week-8:

During my last week, interacted with the senior management and put my quarries to them whatever I observed and they
were kind enough to respond to them in their best possible manner. Got knowledge of country's Debt market structure and why
there are consistent borrowings by the Govt to bridge the gap of expenditures and revenues. Found some knowledge regarding the
Excessive borrowings and shrinking economy of the country during the discussion and the alarming situation of the country overall
economic growth and way forward in short term and long term policies of the Govt.

The cry of the day, FATF, Grey list and AML/CFT Terms were very accurately and wisely explained and the role of
National Savings truly understood at the end. Some CTRs and a rare STR was also examined during the last week and how it was
reported to various quarter that include FMU and FATF Supervisory Board working under AML ACT 2010 in Ministry of Foreign
Affairs.

3.2. Salient Features of Individual Schemes (NSS)

CDNS offers various savings products which can be purchased by visiting branches or digitally through mobile applications. Some
salient features of the individuals' schemes are given as under.

3.3. Defense Savings Certificates (DSC)

 Introduced in 1966, tenure of these certificates is ten years, but they can be enchased any time after investment

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  These certificates are available in the denominations of PRs. 500, PRs, 1000. 5000, PRs. 10000, PRs. 50000, PRs.
100000, PRs. 500000, and PRs.1000000.

 Minimum investment limit is PRs. 500 while there is no maximum limit.

 The payable amount (Principal + Profit) if not drawn on maturity will not automatically stand reinvested at the rate and
terms & conditions prevalent following the date of maturity.

 Profit is given after complete year

3.4. Special Savings Certificates/Accounts (SSC/R)

 Launched in 1990, it is a three-year scheme, but invested amount may be withdrawn any time after investment.

 These certificates are available in the denominations of PRs. 500, Rs. 1000, PRs. 5000, PRs. 10000, PRs. 50000
PRs. 100000, PRs. 500,000, and PRs. 1000000.

 Minimum limit of investment is PRs. 500 while there is no upper ceiling.

 Profit is paid on completion of every 6-month period reckoned from the date of issue/ deposit of certificates / account.

 The amount of profit (s) earned thereon if not withdrawn on due date (s) will not automatically stand invested from its
date (s) of actual.

 Amount if not drawn on maturity will not automatically stand reinvested.

 Deposits and withdrawals from special saving accounts (except the amount of profit) are in multiples Rs. 500. 

Profit is given after six months.

3.5. Regular income certificates (RIC)

Introduced in 1993, these certificates are of five years maturity, premature encashment before completion of 1,2,3,4 years would
entail service charges 2%, 1.5%, 1% and 0.5% respectively.

 The certificates are available in the denomination of PRs. 50000, PRs. 100000, PRs. 500000, and PRs. 100000 R.s
500000 PRs 1000000. PRs.50000000. PRs.10000000.

22
  Minimum limit of investment is PRs 5,000 while there is no maximum limit.

 Profit is paid on completion of each period of one month reckoned from the date of issue of certificates. 

No further profit is payable on profit not withdrawn.

 This certificate has got exemption from compulsory collection of Zakat at source.

 The profit earned shall he subject to deduction of 15% withholding tax at source.

3.6. Behbood Savings Certificates (BSC)

 Launched in 2003, these certificates are measurable within 10 years

 The certificates can be enchased any time, however, premature encashment before completion of 1, 2. 3. & 4 years' entail
services charge 1%, 0.75%, 0.50 % & 0.25 respectively.

 No less than PRs. 5000 can be law-swill however maximum limit for single is PRs 4000000. And for joint is PRs.
8000000.

 Senior citizens (age 60 & above) and widows are the eligible segments of the society to invest in this scheme (singly or
jointly)

 Profit is paid On the Completion of one month one month reckoned from the issuance date of certificates. 

Profit at the rate and terms of Savings Account are payable on un-drawn profit.

 No Zakat & and withholding tax are replicable on this scheme.

3.7. Savings Accounts (SA)

 No limit for investment has been fixed.

 Profit is cumulated at fixed rate of minimum monthly balance i.e. between the sixth and at date of the month and paid on
yearly basis on 30th June.

 Prof accrued on the deposit balance exceeding PRs. 150000 as on or after 01/07/2002 shall be subject to 10 S
deduction of tax at source.

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3.8. Special Savings Accounts (SSA)

Details are the same as on S. No. 2 for Special Savings Certificates (SSC).

3.9. Pensioners Benefit Accounts (PBA)

 Introduced in 2003, the account is of ten years maturity.

 The deposited amount can be withdrawn any time from the account. However, premature withdrawal before completion of
1, 2 3, & 4 years entail services charge 1%, 0.75%, 0.30 % & 0.25 % respectively.

 The minimum limit of deposit is PRs. 10000 while the maximum PRs. 4000000.

 Profit is paid on completion of each period of one month reckoned from the date of opening of account. 

Profit at the rate and terms of Savings Account is payable on un-drawn profit.

 No Zakat and Withholding Tax applicable on this scheme.

3.10. Prize Bonds (PB)

 This type of security is bearer in nature.

 No maximum limit for purchase

 Bonds cannot be carried abroad.

 The amount of prizes shall be subject to deduction of 15 % with-holding tax at source. 

Prize claim is allowed within six years of date of draw.

 Premium prize bonds can only be purchased from State Bank of Pakistan which acts as an agent of CDNS.

3.11. Sharia Based Products

These products have been launched on May 29, 2023. They are purely Islamic having a Sharia Board. They are offered in the form
of SISA, SITA (1 year, 3 years and 5 years). Every individual or two persons jointly can invest in these schemes.

3.12 Overall Experience

24
My internship experience at National Savings has been a comprehensive and enlightening journey. Over the eight weeks, I had the
opportunity to explore various departments and gain practical insights into the financial workings of the organization.

In the initial weeks, I immersed myself in public dealing, mastering tasks related to accounts, certificates, and customer interactions.
The emphasis on compliance with AML regulations deepened my understanding of the importance of customer due diligence.
Transitioning to the regional office broadened my perspective, exposing me to data management, complaint processing, and
administrative procedures.

The subsequent weeks delved into specialized areas, from budgeting to treasury operations, highlighting the intricate processes
involved in financial management. Spending time at the Regional Accounts Office provided unique insights into pre-audit procedures and
the distinct nature of National Savings' financial structure.

The experience at the Audit & Inspection Office was particularly noteworthy, offering a hands-on understanding of post-audit
activities and the vigilance required to ensure compliance. Counting cash during a surprise visit added a unique dimension to my
internship, emphasizing the meticulous nature of the auditing process.

Engaging with senior management during the final week provided a valuable opportunity to discuss my observations and gain insights into
the country's economic challenges and financial dynamics. The discussions on global financial terms such as FATF and
AML/CFT underscored the organization's role in national and international financial matters.

The exploration of individual savings schemes (NSS) enriched my understanding of the diverse financial products offered by National
Savings, each tailored to meet different needs. From Defense Savings Certificates to Sharia-based products, the range reflects the
organization's commitment to serving a broad spectrum of investors.

Overall, my internship at National Savings has not only equipped me with practical skills but also deepened my understanding of the
financial sector, government operations, and the critical role National Savings plays in contributing to the country's economic stability.
The exposure to diverse departments, tasks, and the insightful discussions with senior management has significantly enriched my
professional development.

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 CHAPTER 4

Significance of CDNS in Mobilizing Private Savings & Analysis

i. Avenues for Investment for Household or Private Savings

Personal savings are invested in a variety of ways, including investment in: (a) National Saving Schemes (b) Bank Deposits:
Fixed Term, Savings Deposits (c) Mutual Funds (d) Life Insurance Policies (e) Business Equity and Corporate Bonds---both through
acquisition of securities listed on the stock exchange as well as direct investment in other private businesses (f) Real Estate (g)
Contractual Retirement Savings---Individual interests in provident, gratuity and pension funds (h) Money Accounts for investment in
PIBs and T-Bills

Ii.Savings Instruments of CDNS

Products offered by the CDNS can be categorized as follows: (a) Fixed Income Guaranteed Products: Regular Income
Certificates, Saving Accounts, Special Savings Accounts, Defence Savings Certificates, Special Savings Certificates (b) Index Linked
Products (with capital guarantees): None (c) Products with return wholly or partly in the form of prizes: Prize Bonds (d) Welfare
Products: Behbood Savings Certificates, Pensioners Benefit Accounts 24. These NSS instruments are non-tradable long-term
bonds and saving certificates which meet the savings and investments needs of various eligible investors including pensioners, small
savers of lower income groups, particularly the fixed income group. These saving instruments have different maturity profiles,
ranging from 3 years to 10 years, with varying interest rates. The government also launched the first-ever listed, scrip-less and
tradable National Savings Bond (NSB) Page 50 of 176 on January 11, 2010 with a maturity of 3, 5 and 10 years but was not a
success because of much established Pakistan Investment Bonds (PIBs). In addition to medium and long-term certificates, the CDNS
offers savings accounts both checkable and non-checkable. The CDNS also offers a bearer instrument, National Prize Bond to tap
the savings of the informal sector.

The funds raised through NSS other than the Prize Bonds are classified as Unfunded debt as both the inflows from NSS
and payments of NSS are unpredictable whereas the Prize Bonds are part of Permanent Debt. This issue emanates from the nature
of NSS, the market it serves (retail investors) and pricing mechanism, in particular: (i) the schemes offered by the NSOs are not
for a fixed size of issue but are available on tap to potential investor, i.e. anyone eligible to invest in a scheme; (ii) all schemes have
premature encashment option, though the schemes are designed to encourage continuity to full maturity; and (iii) payment of interest

26
and principal are not made automatically but dependent upon the investor visiting the NSC concerned or post office to collect the
amounts due. Prize Bonds are bearer certificates with pre-determined award for each denomination of Bonds

iii. Share of Various Savings Schemes

. Highly attractive rates of return on NSS made them a popular avenue of investment not only for the general public but also for
corporate investors. The popularity of NSS instruments rose to the extent that every year the government received a net inflow of
private funds from NSS after servicing the NSS and repaying the principal from gross receipts. The introduction of Pensioners'
Benefit Accounts (PBAs) and Behbood Saving Certificates (BSCs) during FY2003 and FY2004 respectively with return
significantly higher than other NSS instruments attracted many eligible customers as well as allowing institutional pension funds
investment which helped in mobilizing savings from October 2006 onwards. 27. The share of Defence Saving Certificates has
decreased from 67.7 percent in 1971 to 12.4 percent of the total NSS portfolio in 2015. Likewise, share of Regular Income
Certificates has declined from 26.8 percent in 2000 to 15.7 percent. Concomitantly, share of Behbood Saving Certificates has
increased to 26.0 percent and that of Pensioners' Benefit Accounts share increased to 8.6 percent. The latter two schemes are
more popular because of high interest rates and these targeting the specific segment of the retail investors' market such as
pensioners, widows and oldage investors. The share of BSC and PBA is likely to increase further as the investment ceiling has been
enhanced from Rs 5 million to Rs 7.5 million effective from July 1,2023.

CDNS Data on 30-06-2023

Net Portfolio % age in overall
Certificates in Millions Investment
Bahbood Savings Certificates 1,001,003.75 30.82
Regular Income Certificates 461,485.77 14.21
Defence Savings Certificates 428,194.88 13.18
Pensioners' Benefit Account 404,352.38 12.45
Special Savings Certs (Regd) 297,576.53 9.16
Rs. 1500 /= 168,782.11 5.20
Rs. 750 /= 113,827.94 3.50
Special Savings Accounts 108,951.34 3.35
Savings Accounts 74,927.61 2.31
Postal Life Insurance 47,230.33 1.45
Rs. 40000/= Premium 32,986.95 1.02
Rs. 200 /= 28,968.40 0.89
Rs. 25000/= Premium 21,698.95 0.67
Short Term Savings Certificates (3 M) 20,958.81 0.65
Rs. 100 /= 10,386.03 0.32

27
Short Term Savings Certificates (12 M) 7,970.21 0.25
Short Term Savings Certificates (6 M) 5,621.18 0.17
Sarwa Islamic Savings Account (SISA) 3,808.52 0.12
Rs. 15000/= 1,869.25 0.06
Rs. 7500 /= 1,605.88 0.05
Mahana Amdani Accounts 1,440.62 0.04
Rs. 25000/= 835.98 0.03
Rs. 40000/= 831.52 0.03
Sarwa Islamic Term Account (SITA) 3 Years 557.7 0.02
Sarwa Islamic Term Account (SITA) 1 Year 508.15 0.02
Khaas Deposit Accounts 310.59 0.01
Rs. 1000 /= 302.76 0.01
Special Savings Certs (Bearer) 272.61 0.01
Rs. 10000/= 262.34 0.01
Khass Deposit Certificates 215.88 0.01
Sarwa Islamic Term Account (SITA) 5 Years 207.6 0.01
Shuhadas Family Welfare Account 152.58 0.00
Rs. 500 /= 96.74 0.00
Rs. 10/= 25.28 0.00
Rs. 50 /= 23.69 0.00
National Deposit Certificates 16.6 0.00
Rs. 5/= 15.63 0.00
Rs. 5000 /= 14.00 0.00
Premium Savings Certificates 0.46 0.00
Grand Total 3,248,297.57 100

28
 10,386.03
20,958.81
21,698.95
Bahbood Savings Certificates
28,968.40 3,808.52
5,621.18 Regular Income Certificates
32,986.95 7,970.21
74,927.61 47,230.33 Defence Savings Certificates
108,951.34 Pensioners' Benefit Account
113,827.94
Special Savings Certs (Regd)
Rs. 1500 /=
1 ,001,003.75 Rs. 750 /=
168,782.11
Special Savings Accounts
Savings Accounts
297,576.53
Postal Life Insurance
Rs. 40000/= Premium
Rs. 200 /=
404,352.38
461,485.77 Rs. 25000/= Premium
Short Term Savings Certificates (3 M)

428,194.88 Rs. 100 /=

Short Term Savings Certificates (12 M)
Short Term Savings Certificates (6 M)
Sarwa Islamic Savings Account (SISA)

29
iv. Rates of Return on NSS

Rates of return differ according to NSS maturity period, mode of repayment of principal, frequency of profit payments,
tax treatment, etc. Furthermore, in the absence of secondary market for NSS, most of the certificates carry early encashment
facility

There was no established market mechanism for determination of profit rates of the NSS. These were administratively
controlled and were subject to discretion. Following the offer of exceptionally high and above market returns, particularly during
1990s, the NSS attracted significant investment. This led to (i) sharp rise in the government cost of financing its deficit; (ii) as the
instruments were available 'on tap' basis, the flows were not predictable and made the government funding cost volatile; (iii) the
inherent volatility in these flows, and consequent uncertainty over the government funding requirement from the banking system
added difficulty in formulating stable monetary policies; (iv) the administered nature of NSS profit rates were a major source of
distortion in the term-structure of interest rates; (v) as these instruments were not traded (price discovery was not possible), these
did not form benchmark for corporate debt; (vi) arbitrage opportunities due to wide interest rate differential between NSS rates and
lending rates on loans; and finally (vii) the implicit put option (the bond could be substituted at any time) meant that corporate issues
would have to be priced at much higher yields to compete with NSS instruments. 30. In the light of these issues, the government
initiated NSS reform including: (i) the government barred all types of institutional investment in NSS in March 2000; (ii) the
government issued long-term debt instruments, i.e. PIBS; and finally, (iii) the rates of return on NSS were loosely tied to those of
PIBs of same maturity with a premium (semi-annual adjustment). Nevertheless, a new formula linking the semiannual adjustment of
NSS rate more directly to changes in PIB yields became effective on July 1, 2004. To align these rates closer to market, the
Ministry of Finance moved from annual fixing of interest rates to bi-annual rates in 2000, quarterly adjustment of NSS rates in
FY2012 and now shifted to bi-monthly fixing of rates following first auction immediate after announcement of Policy Rate. But the
policy has then changed to on monthly basis through budget wing of ministry of Finance.

v. Performance of NSS

NSS instruments are immune to market fluctuations in interest rates due to their non-tradable nature. These do not
provide inflation adjusted returns; nonetheless their relatively higher rates make them attractive investment instruments. Currently, real
rate of return on all NSS instruments is positive because of steep decline in CPI.

The decade of 1990s saw an upsurge in mobilization of funds through NSS from Rs 132 billion in 1990 to Rs 634
billion in 2000, growing at a compound average growth rate of 17 percent. Outstanding investment in NSS rose from 3.75 percent

30
in 1980 to 17 percent of GDP in 2000 which has now declined to 9.0 percent of GDP. The tremendous growth came at the back of
very high returns on NSS, peaked to 18 percent in 1996, and resulted not only in mounting debt and servicing burden, but
significant dis-intermediation in the financial system as well. Today, the total outstanding NSS portfolio is around Rs 3,248.297
billion net of prize bonds the outstanding stock of which is Rs 37.128 billion. The investment in NSS increased from Rs 634 billion in
FY2000 to Rs 2,375 billion in FY2015, an increase of 275 percent.

Significance of NSS in Deficit Financing and Raising Government Debt

i. NSS and Deficit Financing

Funds mobilized through NSS are an important source of deficit financing with non-inflationary borrowings. Share of
NSS net flows in deficit financing moved from 31.8 percent in 1990 to 74 percent in FY1999. Massive increase in net inflows
helped the cash starved government to fund its expenditure especially in the presence of the cap on government borrowings from the
central banks under the Stand By Arrangement (SBA) of the IMF. Nevertheless, it started declining thereafter and the share of NSS net
inflows in deficit financing in FY2015 was only 17.9 percent. ii. NSS and Domestic Debt .

Funds mobilized through NSS are generally perceived to be costly as compared to other sources of borrowing (T-Bills
and PIBs). This increases the debt servicing-burden on the fiscal account. Provision of early encashment facility (i.e. implicit put
option) on most of the schemes distorts the maturity profile of government debt. Effectively, these schemes have no maturity
profile, which ultimately undermines government's efforts to manage its financing. Stock of NSS is not a true reflection of
government debt liabilities as it represents the face value of NSS investments, without taking into account accrued interest. Official
numbers can be quite misleading given that DSCs are bullet bonds - requiring payment of principle and accumulated returns (which
accrue on annual basis) on demand.

Nevertheless, it is argued that penalty on premature encashment, dormant cases, fixing rate of return at 90 percent of
PIBs makes the cost of non-bank borrowing become lower than the cost of debt raised through the market. 36. During early
1980s, growth in Pakistan's stock of domestic debt remained in check because of substantial external inflows in the form of foreign
aid and foreign remittances. Share of NSS in domestic debt was only 14.4 percent in 1980. However, Pakistan's stock of domestic
debt started rising in the 1990s mainly on account of widening revenue-expenditure gap and decline in concessional foreign lending
which severely impacted government's ability to meet its internal and external obligations. Consequently, the government started
raising funds domestically through NSS and other means. As a result, the share of NSS in domestic debt surged to 37.5 percent in
1990 which peaked to 48.6 percent in 2000. However, due to downward trend in NSS rates since FY2013 and use of other
financing avenues, share of NSS in domestic debt has declined to 19.2 percent. NSS as percent of bank deposits was 30 percent in
FY2015 because of BCS and PBA. However, NSS is still a major contributor to non-bank borrowings

31
iii. NSS and Liquidity Management

Given the lack of an effective maturity profile, the huge stock of NSS instruments also complicates liquidity management
in the interbank market. Institutional investment, such as Pension Funds, in various NSS instruments further complicates this issue
due to the large volumes involved. iv. NSS and development of the Bond Market 38. Various characteristics of NSS along with high
returns are one of the major impediments for the development of the nascent bond market in the country. Provision of institutional
investments in NSS severally affects the demand for corporate bonds. At the same time, risk-free returns on these schemes distort
price discovery of corporate debt instruments. However, PIBs auction has helped in determining the benchmark for corporate bonds
to a large extent.

32
 CHAPTER 5
CONCLUSION AND RECOMMENDATIONS

5.1 CONCLUSION
Presently, CDNS is a key player in the domestic debt management field which is manifested by its portfolio of over Rs. 3.4 trillion with
an extensive outreach to cover around 4 million valued investors throughout the country with a network of 376 branches. It is
recognized that while NSS play an important role in mobilizing financial savings in the economy, the outstanding stock of NSS
instruments along with the unique characteristics of these schemes create distortions in the financial sector. Among other issues
pertaining to the development of debt capital market in Pakistan, it has also been thoroughly reviewed/investigated specific issues
pertaining to the structure of NSS which pose a major challenge in reforming debt capital markets and gave several
recommendations to overcome the distorting impact of NSS schemes on the debt market.

According to the findings of the intern, current structure of NSS is the most significant challenge in the reform of Pakistan's debt
capital markets, which is mainly due to the subsidized nature of its saving products. While discussing distinct advantages and
disadvantages of the NSS system,

 On the positive side, it provides a reliable source of long-term funding to the government and a widespread distribution
network that provides access to the retail investor base.

 On the negative side, it has historically been a costly source of funding for the government due to the inefficient pricing
structure and the free embedded put option. Moreover, the report has also concluded that although several measures have
been implemented to bring the NSS rates of returns in line with PIBs but despite all these measures, NSS products are
quite attractive as compared to other market product mainly due to higher interest rates, embedded government guarantee,
and most importantly, the in-built put option that allows investors to redeem the investment at any point in time without
any redemption charges. Subsequently, comparable market based instruments, in contrast, seem unattractive and non-
competitive to the retail investor base. Furthermore, the government has limited control over the amount of money that
can be raised due to the 'on tap' nature of NSS instruments.

The management of CDNS lacks the authority to adopt a pro-active operational strategy which hampers its ability to achieve desired
results. Due to this inability, CDNS is facing a lot of problems including those of hiring professionals. Opening new branches,
creating new regions, entering in contracts /ventures, etc. From operational point of view, majority of its employees will retire in few
years and being from pre-technology era, they are unable to cope up with new technological changes that are introduced in CDNS.

33
The CBA is majorly run by a private company and the current staff is unable to get the reins of the CBA due to technical
impotency. The private company hired is also costing the Ex-chequer a major chunk of funds. On the strategic front, the lack of
prompt decision-making powers and limited capabilities of research/analysis are being faced.

Though CDNS has launched its mobile application, it is only available on android phones. It is not yet available on apple store which is
limiting its reach. The application is also not completely bug free. Only transactions with three banks can be made and that too of
inward funds transfer. There is the option of digital prize bond but due to redt apish in the government sector it is still early to say
when it will launch. Unlike other mobile banking apps, utility and government fee cannot be paid from it. CDNS has a long road to
cover in order to be able to compete in the current digital world.

In today's globalized world, a customer-oriented organization can hardly survive without taking into account the customers' needs.
Despite the launch of Sharia based products, CDNS has a narrow portfolio of products which are mainly geared towards special
segments of society such as senior citizens, pensioners, differently abled persons and widows. A lot of other segments need to be
explored and tapped in order to be a leader in its field. Secondly, no proper market survey takes place to find out what exactly the
customers want.

The National Savings Organization has very weak marketing activities for the promotion of its products. The main source of its
marketing is the printed brochures which are available at its counters. In the present era of advertising, such a passive and insensitive
organizational attitude towards the importance of marketing leads to ultimate failure.

It has great potential to help the country in achieving the desired rate of saving which is very vital for the uplift of the economy. But
there are some problems which hinder its way to play its role more effectively and efficiently. Once these problems are addressed
properly and appropriate steps will be taken to improve the present status quo. One can say for sure that our own savings can at
least be sufficient to meet our domestic investment needs. The state of affairs, as analyzed above calls for immediate remedial
measures so that ground is creased for a very important financial institution of the country to gain roots and flourish as an
effective instrument for mobilization of savings deposited by the general public, as well as government and non-government
institutions.

5.2. RECOMMENDATIONS

In the 21st century, organizational changes are taking place globally on a daily basis. Today human resources are considered as the most
valuable asset of an organization as they play a very important role in the success of an organization.

34
For CDNS to be a more successful and effective organization, it is absolutely necessary to equip the organization with well-educated and
well-trained personnel. It will not remove the current staff deficiency in the organization but also cater to the needs of a
customer-oriented nature of the organization efficiently.

In-service training is very vital now-a-days in order keep abreast with latest developments going the field for that reason, training
and development should be a priority of the organization in order to excel in the financial business. Since National Savings
Organization is the member of the World Savings Banks Institute, Geneva, it should endeavor to secure maximum opportunities of
training abroad for its officers including exchanges of visits at the higher levels with a view to establishing a regular contact with the
member organizations for an exchange of information on latest method/techniques of saving Through these acts, the morale and
spirit of employees can be rejuvenated.

 It is stressed the need to integrate the NSS instrument into the mainstream capital markets and gave two options for
doing so. The first was to convert the NSS instruments into market-based instruments and pass them on to retail clients
directly through the NSS network. The second option suggested the withdrawal of the "implicit put option" that allows
redemption at zero penalties. This is necessary step in order to make NSS instruments competitive with market
instruments.

 Further, In order to use the NSS retail distribution network efficiently, it is recommended that "NSS retail distribution
network can be leveraged and its retail investor base made more resilient by allowing private sector mutual funds access to
the platform for distribution of their investment products. Mutual funds will be attractive to the retail investor base as
they can be tailored to varying needs and investment/saving profiles.

 It is further suggested that instead of NSS, government should fulfill its long-term investment needs through PIBs. This
would provide the government more control over its financing needs unlike the NSS, whose 'on tap' nature puts it outside
the realm of government control.

35
RECOMMENDATION

36