Institutions barred from investing in savings schemes.

Byline: Fayaz Hussain

KARACHI -- The government on TueAsday restricted financial institutions from investing in the national savings schemes (NSS) products after July 1.

The move aims to discourage financial institutions across the country from parking funds in the NSS products and divert these investments towards other long-term instruments such as the Pakistan Investment Bonds and stock market etc.

An official notification issued by the Finance Division said, 'in light of decision of the committee constituted to finalise plan for elimination of institutional investors from NSS products and recommendation of the State Bank of Pakistan, the competent authority has been pleased to direct that institutional investment in NSS shall be discontinued with effect from July 1.'

The notice further said the 'Central Directorate of National Savings (CDNS) is requested to take further necessary action accordingly.'

Various pension and provident funds invests large sums in the NSS products. These funds can be instead be invested in the capital markets.

The...