KARACHI, ISLAMABAD: Pakistan on Thursday issued a much-awaited investment instrument for overseas Pakistanis, offering them attractive annual returns of up to 6.75 percent.
Prime Minister Imran Khan launched the Pakistan Banao Certificates (PBC) – or Build Pakistan bonds – in a ceremony in Islamabad.
The certificates were issued in recognition to the contributions that overseas Pakistanis have made to their home country’s national development.
The PBC is a sovereign, US dollar-denominated, retail-level instrument for Pakistanis who have their bank accounts abroad. Available with three and five-year maturity period, the bonds offer annual profit rates ranging between 6.25 and 6.75 percent, respectively.
It is the first sovereign retail instrument offered by the government that allows overseas Pakistanis to contribute in their country’s development and earn handsome returns.
The minimum investment size is $5,000 with no upper limit. The State Bank of Pakistan (SBP) has been tasked to issue these certificates.
Addressing the launching ceremony, the prime minister urged overseas Pakistanis to make the scheme successful by purchasing the certificates. “The government has offered attractive returns on these certificates. The scheme will not only help overseas Pakistanis earn profits but also make it possible for them to extend their help in reviving the economy at home," said Khan.
He lauded the role of Pakistani expats for constituting 85 percent of the country's remittances, vowing to facilitate them further.
He also said that “going to the IMF for a bailout program was not difficult" and had been done by previous government; however, he was looking for "long-term solutions.”
Khan said, “Although the balance-of-payments crisis is not over yet but the country will soon be out of this difficult period.”
He expressed hope that around eight million overseas Pakistanis will positively respond to the offer and purchase the certificates.
The Ministry of Finance said in a statement that these certificates will also "generate foreign exchange for the socioeconomic and human development of Pakistan." The certificates also reflect the commitment of the government to ensure that development financing is diversified and made sustainable in the long-term interest of the country, the statement read.
“I think it is a good step in the right direction,” Miftah Ismail, former finance minister in the Pakistan Muslim League-Nawaz (PML-N) administration, told Arab News, adding: “The overseas Pakistanis must come forward to buy these certificates in large numbers since the profit is good and it will benefit Pakistan.”
Pakistani expats carrying National Identity Card for Overseas Pakistanis (NICOP), or Pakistan Origin Card (POC) with their bank accounts abroad can invest in the PBC digitally through a dedicated secure website, www.pakistanbanaocertificates.gov.pk.
Every investor will be issued a unique identity number and profits in US Dollar will be remitted semi-annually to the investor’s specified account maintained abroad.
Further incentives include exemption from withholding tax and compulsory deduction of zakat. Investors will also have the option to encash the certificate prematurely in Pak Rupees without any deduction.
Analysts say the initiative is a good step for overseas Pakistan, especially small investors. “Those maintaining bank accounts abroad will benefit from this launch since the scheme offers them good returns,” Muzzamil Aslam, senior economist, said, adding that “the success of the issue will depend on how the government markets the product.”
