ISLAMABAD -Financial Action Task Force has put forward yet anothercondition upon Pakistan over the issue of National Savings scheme.
Financial Action Task Force (FATF) recommendations has asked Pakistan toscrutinise the National Savings. The Asia Pacific Group in its recentlypublished Mutual Evaluation Report has pointed out a number of deficiencieson the part of Central Directorate of National Savings (CDNS) which hasnegatively affected the overall grading of different recommendations.
The FATF wants Islamabad to trace and identify the owners of theseinvestments in the National Savings schemes.
It has already given a deadline of February 2020 to remain on grey listwith a set of recommendations to Pakistan for implementation.
On Saturday, the finance division through promulgation of the NationalSavings Schemes (AML-CFT) Rules, 2019 has decided to engage an AML-CFTcompliant bank, through competitive bidding, to put in place therequirement as well as the necessary training of employees of CDNS.
Accordingly, Expression of Interest, in consultation with the State Bank ofPakistan, has been sought from the interested bank to conduct KYC (KnowYour Customer) and other requirement of new as well as existing client ofCDNS.
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This will include the biometric verification and screening of potentialclients in the UN Proscribed Person List.
Currently, the CDNS manages portfolio of Rs4,038 billion of more than sevenmillion investors. National Savings schemes provide risk-free andcompetitive avenue to all segments of society, especially the mostvulnerable — senior citizens, pensioners, widows, physically challengedpersons and family members of martyrs.
However, it provides a non-inflationary and cost effective borrowing togovernment of Pakistan to bridge the overall fiscal deficit, whichultimately reduces dependency on external borrowing. Further break-up showsthat 19 per cent of domestic debt consists of National Savings schemes,while these deposits are equal to 28pc of total deposit of scheduled bank.
