National Savings Scheme to offer Islamic banking services
According to the details, this plan will help depositors put their cash into Islamic Shariah-compliant Ijara sukuk while the work is currently underway on its specifics like the price of the retail Ijara sukuk, its size, duration, maturity period and the mode of encashment during and at completion of the maturity period, reported Khaleej Times.
As soon as that happens, millions of new accounts are expected to be opened, bringing a huge population of medium and small savers into the banking stream.
Millions of others who are currently operating accounts in conventional banks and are receiving interest on their deposits may also be snatched away by the NSS because of the rising religious sentiment to go Islamic.
"We collected deposits totalling Rs232 billion from our savings schemes in financial year 2015-16 and a still larger amount of Rs337 billion in 2014-15," according to an NSS spokesman.
Investments in all types of the NSS go directly to the government of Pakistan, which uses this cash inflow to fill the budgetary gap and to fund its development projects.
A senior official of the SBP said the central bank is happy over the potential size and volume of business coming into direct government fold.
He pointed out that "years of our experience with budget- making and borrowing to fill is shortfall, particularly on account of Prime Minister Nawaz Sharif's policy to enlarge spending on welfare of the poor, energy generation and supplies and infrastructure projects".
NSS deposits by people totalled Rs233 billion in 2015-16 and Rs337 billion in 2014-15. In the event of introduction of Ijara sukuk in the NSS, some of these deposits are likely to be switched to this Islamic mode - Ijara sukuk.
Extending Shariah-compliant modes to the NSS will be a big success of SBP's National Financial Inclusion Strategy and its Vision 2020 to bring more and more new depositors into the banking fold.
More people coming into banking, with deposits rising, both in the conventional banking and the fast-track growth of Islamic finance and banking modes, will help businesses that are demanding larger and larger amounts of credit.