The federal government has identified 111 National Savings centres as inefficient and financially unsustainable, with plans to either close them or merge them with nearby branches that remain operational.
The move is aimed at reducing the cost of maintaining a large branch network and improving the efficiency of the Central Directorate of National Savings (CDNS).
Under a notification issued by National Savings, the number of centres could fall from 374 to 263 if the proposed closures and mergers go ahead.
111 National Savings Centres Marked For Rationalisation
The government has introduced an operational cost benchmark to assess the financial performance of National Savings centres.
Under the benchmark, operational expenditure should not exceed Rs2,500 for every Rs1 million held in deposits. Centres that fail to meet this threshold have been classified as inefficient and placed under review.
The 111 identified centres have been directed to prepare practical plans aimed at improving their financial position.
These plans can focus on reducing operating costs or increasing business and deposits to improve the viability of individual centres.
Centres Can Improve Performance To Avoid Closure
Closure will not necessarily be automatic for every centre included in the list.
The affected branches can demonstrate that they have a viable path toward financial sustainability. Management may also explore ways to increase deposits and attract additional business before a final decision is taken.
The new approach effectively links the continued operation of each centre to measurable financial performance.
Relocation And Merger Options Remain Available
Relocation is another option available for centres that are struggling to generate sufficient business at their existing locations.
A weak centre could potentially be shifted to an area where demand for savings and investment products is stronger.
Where relocation is considered, regional directorates have been asked to submit business and relocation plans within 15 days.
The restructuring could therefore involve a combination of closures, mergers and relocations rather than the immediate shutdown of all 111 centres.
Staff Deployment To Be Reviewed
The proposed rationalisation will also affect the deployment of employees working at the centres under review.
Where a centre is closed, management will be required to prepare a list of all employees posted there. The information will include their residential locations as well as their preferred locations for future postings.
The exercise is intended to help management identify alternative placements for staff affected by the branch closures.
Why National Savings Centres Matter
The Central Directorate of National Savings is a state-owned savings institution operating as an attached department of the Finance Division under the Ministry of Finance.
It mobilises funds from individual savers and channels those resources to the government as non-bank financing, helping fund the fiscal deficit.
The network therefore plays an important role in connecting retail savers with government-backed savings instruments.
Smaller Cities Could Feel The Impact
While reducing the number of branches could help lower operational costs, the restructuring could also affect access to National Savings products in smaller towns and less densely served areas.
Customers using prize bonds, savings certificates and pensioner accounts may have to travel farther if their local centre is closed without a nearby alternative.
The impact will depend on how the government implements the proposed closures, mergers and relocations and whether replacement branches can accommodate customers from affected centres.
Government Balances Cost Reduction With Access
The proposed reduction from 374 to 263 centres represents a significant restructuring of the National Savings branch network.
For the government, the objective is to reduce the cost of maintaining centres that do not generate sufficient business while improving the overall efficiency of the institution.
For customers, the key issue will be whether the revised network continues to provide convenient access to savings schemes, particularly outside major urban centres.
The final outcome will depend on the viability plans submitted by the affected centres and the decisions taken on closure, merger or relocation.