ISLAMABAD, June 27: The State Bank has allowed the Central Directorate of National Savings (CDNS) to offer its saving schemes to the Overseas Pakistanis living in Saudi Arabia and other Middle Eastern countries.

Official sources told Dawn that initially Pakistani banks, operating in Saudi Arabia, were being authorised to sell different saving products in the kingdom on behalf of the CDNS.

Habib Bank and the United Bank, which have presence in the kingdom, will launch national saving products with the help of other foreign banks operating there.

Sources said the CDNS was currently finalising negotiations with concerned banks in Saudi Arabia for striking an early deal with a view to sell different saving instruments to expatriates from the next financial year.

Pakistanis living in the United Arab Emirates (UAE, Qatar and Oman were already taking part in government securities. “Our presence in these important countries of the Middle East is already there but we are now interested to go to other countries as well for which the central bank has given a go ahead signal to the CDNS,” a source said.

So far HBL and the UBL had been asked to represent CDNS in the Middle East. “We will see whether we need the services of other banks as well at a later stage,” he said adding that CDNS was hoping to raise lot of money by operating in the Middle East.

“Potential is there for savings capitalisation as the earning of

Pakistanis living outside the country is much more than those living in Pakistan,” he asserted.

Pakistanis living aboard, sources said, could take part in the development of their motherland by participating in various government securities. “We expect billions of rupees from our proposed schemes in the remaining countries of the Middle East.”

Asked about launching national saving schemes in Europe and the United States, he said that it needed clearance by their regulatory authorities and that it might take some time to do that.

“We will definitely approach them (regulatory authorities of Europe and America) once we cover our Middle Eastern market and this would be the second phase of our plan to go abroad for selling our profitable saving products,” he said.

The first phase, he said, will commence from 2007-08 by starting operations from Saudi Arabia for which all preparations were being completed after getting clearance from the central bank.

He said similar saving instruments currently available to overseas Pakistanis living in the UAE, Qatar and Oman, will be offered to those residing in Saudi Arabia. “But some new instruments can also be launched soon for which the design of two products is currently being finalised,” he said.

He said the CDNS, after having achieved good market capitalisation in the Middle East, will be in a position to launch variety of new instruments according to the choice of the investors.

“We do not mind competition with banks in line with the guidelines given by the central bank,” he said when asked whether competition with banks could hinder the interest of the CDNS.

He said CDNS believed in health competition and the level-playing field that has been provided by the federal government.

“But in government securities, people have a lot of confidence which is helping us to generate adequate revenues on behalf of the government,” he said. He said investors felt secured in investing in various government securities like national savings and they did not mind even if the rate of return was slightly lower compared to banks and other private financial institutions.

He said since CDNS did not have any kind of hidden charges and penalties in case of pre-mature encashment, depositors felt more comfortable in investing various national saving schemes.