Government launches Pakistan Banao Certificate for overseas Pakistanis to invest in local development

Government of Pakistan has launched Pakistan Banao Cerficate (PBC) to allow Pakistani diaspora across the world to invest in development of Pakistan.

Pakistan has been struggling with balance of payment issues for a while now. With shrinking exports and growing import bill, previous governments were struggling to make ends meet when it comes to demand and supply of Dollars in the country. The usual solution employed by many governments in the past was to take loan from IMF, dilute our currency, and flood local market with borrowed dollars. This was a short term solution and it has forced Pakistan to request assistance from IMF over 21 times since 1950s.

After Pakistan Tehreek-e-Insaaf came in power during general elections 2018, the government has decided to tap the investment potential of expats by offering them incentives to invest in Pakistan, bolstering our foreign reserves and reducing balance of payment crisis.

Why overseas Pakistanis are an asset?

Pakistan has the sixth largest diaspora in the world, consisting of expatriates who are spread across the whole world. With more than 500,000 Pakistanis in USA, 2.2 million in Saudi Arabia, 1.3 million in UAE, and 1.2 million in UK, overseas Pakistani submit more than 20 billion dollars worth of remittances every year. This constitutes a big part of Pakistan’s foreign reserves.

PBC as an easy form of investment

With the issuance of PBCs, government is looking to increase its reliance on overseas Pakistanis. It will also provide those patriot citizens who are, due to one reason or another, living away from their own country, a chance to participate in the development of projects like Mohmand and Diamer-Bhasha dams. These certificates also provide an easy form of investment for expatriates which not only provides higher return rates, but also come with the sovereign guarantee of Government of Pakistan.

Salient features of PBC

Here are some of the salient features of PBC:

• The currency in which these certificates will be issued is only Dollars
• The expected profit rate for 3 years is 6.25 percent and for 5 years is 6.75 percent, which is payable semi-annually
• The minimum investment allowed through PBCs is 5,000 US Dollars and there is no minimum limit with integral multiples of 1,000 USD
• The profit will be given in US dollars or Pakistani Rupees, depending on the origins of the bank account
• The certificates will be scripless, which means that there is no need to carry a physical certificate. They will be issued and managed through the online portal created by the government.
• Premature encashment in Pak Rupees can be done anytime without levy or penalty. In case of encashment in USD within first year of issuance, a penalty of 1 percent will be levied
• The certificates will be issued through Subsidiary General Ledger Account (SGLA) and will be placed in a separate account of National Bank of Pakistan, namely, NBP PBC holding account.

Pakistan Banao Certificates provide much large profit margin as compared to other national bonds offered by other countries. Compared to US’s 2.49 and 2.875, and KSA’s 2.89 and 3.5 percent profit on their national bonds, PBC offers 6.25 and 6.75 percent profit on 3 and 5 years respectively.

Register investment request for PBC

Government is launching an online portal to help expats easily and effectively submit a request for investing through Pakistan Banao Certificate. Here’s the process that any expat will have to follow to avail a PBC:

1. After creating their profile and verifying it through CNIC/NICOP/POC, the investor can add his/her Investment request and Bank Account Details;
2. On completion of investment and bank account details, the Investor will get the unique reference number for remitting the funds to the PBC Bank Account at National Bank of Pakistan (NBP) New York
3. Investors can remit funds from their own designated bank accounts only
4. Screening of the applicant will be done by United Nations Security Council (UNSC), European Union (EU), Bank of England (BOE) and Office of Foreign Assets Control (OFAC) list for clearance, which is mandatory to submit funds
5. National Bank of Pakistan will open the Investor Portfolio Securities (IPS) Account of the investor after verification and screening of investor’s credentials. In addition to opening the IPS account, NBP will provide services such as, collection of proceeds, distribution of periodic payments (profit and redemption including early redemption), and handling of investors queries with respect to investment in the certificates
6. Funds can be remitted to SBP account maintained with NBP New York, details of which can be found on State Bank of Pakistan’s website.
7. State Bank of Punjab will issue the security and inform the investor upon confirmation of receipt of funds
8. The investor can view the status of his/her investment application by accessing the PBC Portal through his/her User ID and Password.

This whole process should take no more than 5 to 7 minutes, adding to it the benefit that it is a completely online and paper-less procedure.

Overseas Pakistanis are a huge asset for our country. They already send billions of dollars back to Pakistan each year, and, with this new initiative by the government, they will be able to invest their hard earned money back in their country. Thanks to the impressive return rates that government is promising, they will also be able earn a handsome profit at the same time.