ISLAMABAD, June 6: The National Savings Organisation launched a new scheme for students and another one for small savers on Wednesday.

The Students Welfare Bond bearing denomination of Rs100 will be available at saving centres, State Bank and commercial banks by August as legal requirements are currently being completed, said Zafar Shaikh, Director-General of National Savings at a news conference.

The first prize will carry an amount of Rs700,000, second prize (three prizes) will carry Rs200,000. The third prize (1,199 prizes) will be of Rs1,000 and can be claimed at National Saving Centres, post offices and scheduled banks. The minimum investment would be of Rs100.

Mr Shaikh said that the new scheme would be an important source to tap currency in circulation and to curtail the inflationary pressure on economy. It would not only reduce dependency of the government on external borrowings but would also help students meet expenses incurred on their studies, he said.

The National Savings Organisation also launched another scheme for small savers under which Short-Term Savings Certificates’ would be offered for investment at all savings centres across the country from July 1.

In reply to questions, Mr Zafar Shaikh, said that the rate of return would be announced on monthly basis. However, in case of any abnormal change in the interest rate scenario, the rate can immediately be reviewed. The payment of profit would be on the basis of maturity of STSC.

About the benchmark, he said it could be 95 per cent of the average of last two weighted average yields of the T-bills of comparable maturities or last auction whichever is lower.

STSC will be issued in the denominations of Rs10,000, Rs50,000, Rs500,000, Rs1,000,000, Rs5,000,000 and Rs10,000,000. Minimum investment limit has been fixed at Rs10,000. Individuals and institutions may invest individual funds, such as pension, gratuity, superannuation, contributory provident funds and trusts etc.

Zafar Shaikh said that the National Savings Organisation was fully committed to provide maximum relief to small savers as the organization provides market-based return to small and middle class savers. By introducing the prize bond of lowest denomination (Rs100), national savings has made efforts to curtail the ‘parchi’ system in addition to encouraging the poor people.

The National Savings Organisation surpassed its target of Rs145 billion much before the end of the current fiscal year to touch the figure of Rs150 billion.

The government has fixed the target of Rs225 billion for the national savings for 2012-13.