Increase in profit rates

IN a welcome development, the Government has announced a significant increase in the rate of profits on various National Savings schemes effective from June 10. After the latest hike, profit rates on various instruments of National Savings have again become attractive both for savers as well as investors. National Savings, a state-owned saving bank under the Ministry of Finance, has been instrumental in mobilizing funds from the general public. It has successfully been contributing in efforts to help bridge the yawning fiscal deficit of the Federal Government, promote the culture of saving and financial inclusion of the disadvantaged segments of the society. The organization, however, lost much of its charm because of a sharp reduction in its profit rates, forcing people to divert their savings to the real estate sector. Many of them lost their life-time savings as they were lured by fraudulent elements to invest in phony schemes. In this backdrop, it is appreciable that the latest increase has made the saving schemes attractive for the general public again. On average, there is an increase of about one percent for the first year and more in subsequent years but in the case of Defence Saving Certificates the increase ranges from 3% to 19% from Ist to 5th year. Return on Islamic saving schemes has also been revised upward, which would encourage more people to invest in these instruments. While appreciating this move, we would urge the Government to chalk out a comprehensive plan to facilitate investors and savers. It is the era of phone, Internet and WhatsApp banking but the National Savings is mostly dependent on manual operations. Why can’t it move towards total digitization and launch its own app like other banks enabling customers to operate their accounts from the comfort of their homes?