Ombudsmans body

outlines four options to

tackle National Savings
issue
ISLAMABAD: A high-powered committee constituted by Federal Ombudsman has
outlined four options available with the government to tackle Central Directorate of
National Savings (CDNS).
The options are: complete phasing out of entity in 10 years, maintaining status quo,
corporatisation and fourthly granting autonomous status which is currently dealing
with Rs3,000 billion portfolio.
The Wafaqi Mohtasib (Federal Ombudsman), taking cognisance under Article 2 (2) of
the Establishment of the Office of Wafaqi Mohtasib (Federal Ombudsman)s Order,
1983 of large number of complaints against CDNS constituted a committee under
Article 9 (1) read with Articles 18 and 19 of the said Order on July 29, 2015. The
committee headed by former federal finance secretary Abdul Wajid Rana and
comprised of Mr. Shahid Rashid, Mr. M. Ayub Khan Tarin, Mr. Ahmad Owais Pirzada,
Mr. Waqar Ahmad, Joint Secretary Finance Division, Mr. S.M.Tahir and Zafar Sheikh
former DG CDNS.
The 176- pages report exclusively available with The News reads out that
strategically, four options are available for the Government for CDNS: (a) PhasingOut Option where CDNS may be completely phased-out over a period of 10 years
and its functions may be transferred to Banks and their Asset Management
Companies and Primary and Secondary Dealers in the Market (US Model); (b) Status
Quo Option where CDNS may continue business as usual operating like an ordinary
poor organization; (c) Corporatisation of CDNS transforming CDNS into a Savings
Bank incorporated under the Banking Companies Ordinance, 1962, as a financial
institution managed by an independent Board of Directors (Malaysia and Sri Lanka
Model) or incorporating it under the Companies Ordinance regulated by the SECP or
converting it into an Authority; and (d) Autonomous CDNS which remains fully
owned Federal Government entity under the Ministry of Finance with full autonomy
in its management and day to day operations (UK Model) and no change in
employees status.
The Committee strongly recommends that given the current administrative and
financial state of affairs, Autonomous CDNS is the Way Forward to provide
necessary autonomy and professionalize its management.

The draft Bill 2016 may provide legal cover to transformation of CDNS,
responsibilities of the Ministry of Finance, governance structure and the
management of CDNS and other details in a comprehensive manner.
However, the organisation, as it exists today, does not seem to be a result of
planned, systemic and scientific construction nor serious thinking and strategy. The
current organisational structure has evolved over time as a result of patch-work as
and when needed rather than a consequence of any management study or
scientific analysis.
The appraisal of CDNS, unmistakably, brings out the following facts and
weaknesses: the portfolio of CDNS has increased from Rs 760 million in 1961 to Rs
3,000 billion; it continues to be functioning as an Attached Department of the
Ministry of Finance, as it was at the time of independence, being managed through
a conservative moribund managerial structure. Its leadership and management
continue to look towards the Ministry of Finance for all policy and operational
matters. Effectively, the CDNS is dealt, managed and controlled by the Budget Wing
of the Ministry of Finance. All proposals, be it policy or operational, are at the mercy
of concerned Section Officer/Deputy Secretary dealing with the CDNS.
The seriousness of the Ministry of Finance to manage this important financial
institution is reflected from the fact that CDNS is without a regular Director General
of BPS-21 for the last two years. Internally, no one qualifies for the job.
Consequently, the CDNS is now being managed by Joint Secretary (Budget) of the
Ministry on part-time basis as additional charge.
The supervisors in the Ministry perceive it as one of the Wings of the Ministry,
therefore, the interaction is quite informal and need and demandbased, generally
for some appointments or financing requirements, rather than formal, structured
and governance oriented. Ministrys approach towards the CDNS seems to be
characterized by (i) aversion to long-term planning and goal setting; (ii) focus on
fire-fighting than restructuring the organization to make it more compatible with
21st Centurys needs and modernizing systems and procedures; and (iii) tendency
to respond only to the urgent issues as opposed to the important issues
Groupings, simmering internal conflicts amongst officers as well as the staff and a
culture of penalising the juniors is quite common. The power groups tend to
shelter the weak in their groups and cover up employees faults rather than the
organization enforcing rules and discipline. Though, the normal tenure of a NSO is
three years, however, he can be transferred on deputation to other department(s)
of CDNS on the pretext of demand or urgent need. This culture is negatively
affecting the organization itself, the operating environment and the public service
delivery, the report maintained.