CDNS develops Overseas Pakistanis Savings Certificates

Central Directorate of National Savings (CDNS) has developed a new product ie Overseas Pakistanis Savings Certificates (OPSCs) aims at targeting remittances from non-banking channels and savings which are not channelized in Pakistan, which may fetch initial investment between US $550 million to US $1,200 million per annum.
According to a brief prepared by Finance Division, National Savings has developed a unique product named as OPSCs which aims at targeting the remittances from non-banking channels and the savings which are not channelized in Pakistan currently and held back in the resident countries of the Overseas Pakistanis. Such an initiative of National Savings will provide Overseas Pakistanis an attractive opportunity to make secured investments. It has been estimated to fetch initial investment in the range of US $550 million and US $1,200 million per annum, calculated on the basis of one-fourth of 4.5 million Overseas Pakistanis living in the initial target market (GCC), if each one of them invests merely US $500 in this product in a year.
Finance Division said that the Overseas Pakistanis can invest in all products offered by Central Directorate of National Savings (CDNS) through overseas branches of Pakistani banks. Overseas Pakistanis can also invest both in projects and equities under applicable rules.
The CDNS is also developing a new investment product that would provide opportunity to overseas Pakistanis to invest either in PKR or US dollar denominated certificates. Present status report may be requested from the CDNS.
It said that remittances in the world represent one of the major international financial resources. During past three decades, it has happened for the second time consecutively that the remittances to the developing countries have fallen. Importance of the remittances for growth, stability and strengthening of economy has sustained the test of time and never subsidized. As reported by The Economist, remittances received in Tajikistan are equal to about 47% of the GDP (US $7 billion), whilst in Pakistan's case, it is merely 6.5% of GDP, and about 40% of Somalia population depends on the money received through remittances as opposed to one-fifth of population in case of Pakistan. This importance of the role of the remittances for development and poverty reduction cannot be over-emphasized.
As far as overseas Pakistanis are concerned, any attractive avenue for parking of foreign exchanges in a government-backed security is lacking. Although efforts have been put in place in terms of Pakistan Remittances Initiative, yet a huge gap still remains unattended, as mentioned above.
Countries like Bangladesh, India, Sri Lanka, Philippines, Nigeria, etc, have already responded and developed specific schemes of investment for the non-resident citizens.
Anecdotal evidence suggests that the existing remittances are consumption-driven. National Savings has developed a unique product named as OPSCs which aims at targeting the remittances from non-banking channels and the savings which are not channelized in Pakistan currently and held back in the resident countries of the overseas Pakistanis.
It is expected that the OPSCs will send immense positive vibes throughout Pakistani Diaspora spread around the globe, and will facilitate in enhancing remittances from the banking channel further. The product offering will make them feel that the government back home cares for them and is coming up with innovative solutions to safeguard their savings by providing both secured and lucrative investment platform.
The OPSCs envisaged will be the Pakistan's first of its kind risk-free and script-less security for overseas Pakistanis on tap basis, like all other retail products of CDNS/ government of Pakistan, which will be mutually helpful to both the government of Pakistan and the overseas Pakistanis. The product is proposed to be offered in both foreign currency and Pakistan rupees with tenure of 3 years and 5 years with monthly profit. The custodian of the product will be CDNS as it is for all the other retail products of the government of Pakistan.
Keeping in view the regulatory requirement of the international markets, the product is proposed to be launched initially in the Gulf Cooperation Council (GCC) and then subsequently be rolled out in UK and USA markets and in third and final phase across the globe.
National Savings has floated a request for proposal (RFP) for appointment of the financial advisor(s), who will be responsible for structuring of the proposed OPSCs jointly with CDNS, analyzing the taxation and legal matters in the target markets, preparing RFP for appointment of the manager/operator who will manage the back-office of this product, and identifying the potential agents/ distributors in the target markets, Finance Division added.