CDNS begins procedural work to introduce Islamic finance

ISLAMABAD: Faced with the growing appetite for Sharia-compliant finance, the Central Directorate of National Savings (CDNS) has decided to launch Islamic finance for which it would start the procedural work next month to provide the facility in the institution.

In this regard, as part of Islamic Shariah compliance, prize bonds and savings certificates would be issued for investment in accordance with Shariah principles, a senior CDNS official told APP on Monday.

CDNS would provide Islamic investment opportunities to its consumers in an institution like the rest of the private and public banking sector, where Islamic Shariah business has now reached 20%.

Responding to a query, the official said that the CDNS collected Rs 850 billion in new deposits in the last seven months of the current 2021-22 financial year, from July 1 to March 31.

In the financial year 2020-21, the annual collection target of CDNS was 250 billion rupees, compared to 352 billion rupees in 2019-20 and 350 billion rupees in 2018-19 to improve savings in the country, the official said.

“The CDNS has started working to increase new investment opportunities and promote digital investment through many new projects,” he explained.

The directorate, in collaboration with the State Bank of Pakistan (SBP), was also developing digital price bonds, which would be available through online electronic channels.

The CDNS was also in the process of launching its first mobile application for purchasing and collecting National Savings Plans online.

“The official said that for better and efficient transfer of funds electronically, CDNS will adopt RAAST in the current month of January for fast flow of funds through its financial tributaries,” he said. .

Initially, CDNS opened three separate accounts in SBP to avoid/stop direct access to Non-Food Account-1 for its Alternate Delivery Channel (ADC) operations, 1Link Payment, UPI Payment and RAAST Payment.

The Finance Division would allocate a budget cap on a daily basis and the CDNS would operate within the allocated funds.

As a result, the GFP Act 2019 was passed in its true spirit for CDNS alternative distribution channels.

He informed that CDNS interest rates were tied to the Pakistan Investment Bonds (PIB) policy established by the SBP. “The CDNS has opened new avenues for public and private investment to document the country’s economy and ensure transparency in the financial system.”

National savings received an increased investment of Rs 80 billion by June 30, 2021, through the newly registered premium bond of Rs 40,000 and Rs 25,000. In 2020-2021, investors withdrew 300 billion rupees after the suspension of the said obligation.

New registered premium price bonds of Rs40,000 and Rs25,000 have been registered by the SBP and cashed only by financial institutions registered under the SBP, he added.

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