KARACHI: Following the decision of the federal government, the State Bank of Pakistan (SBP) has notified revised profit rates of Islamic Naya Pakistan Certificates (Islamic NPC). The maximum rate of return rose to 15.50 percent for investment in Pak rupee.
As per the announcement, the rate of return on dollar-based investment in Islamic NPC rose ranging 1 percent to 1.5 percent.
Accordingly, on a minimum investment of $1,000 with integral multiples of 500, 3-month rate of return (gross annual return before tax) increased by 1.5 percent to 7 percent, 6-month 7.20 percent, 12-month 7.50 percent while the profit rate for 3-year and 5-year Islamic NPC will be 8 percent.
On Pak rupee investment in Islamic NPC, the rate of return increased up to 5.25 percent. On an investment of Rs 10,000 with integral multiples of 1,000, the rate of return (gross annual return before tax) for 3-month will be 15 percent up by 5.50 percent. A rate of return 15.25 percent will be applicable for 6-month Islamic NPC, 15.50 percent for one year bonds, 14 percent for 3-year and 13.50 percent for 5-year Islamic NPC.
On an investment of 1,000 GBP with integral multiples of 500, rate of return will be 5.50 percent for 3-month, 6 percent for 6-month, 7 percent for one year, 7.50 for 3-year and 5-year investment in Islamic NPC. In terms of Euro amounting to 1,000 with integral multiples of 500 investment in the Islamic NPC, the rate of return will be 4 percent for 3-month, 4.50 percent for 6-month, 5 percent for one year and 6.50 percent rate of return on 3-year and 5-year investment.
According to the SBP, USD, GBP and Euro Islamic NPCs have been launched and made effective from 23rd January 2023 and all issuance made on or after Jan 23, 2023 will be classified under USD, GBP and Euro Islamic NPCs-I. The issuance made from 23 to 31 January 2023 will be remunerated for the 9 days of January 2023 based on the weightages, PSR and expected rate announced for the month of January vide SBP’s letter No SFAD/934/INPC-2023 on Dec 30, 2023. While, from Feb 1, 2023, all USD, GBP and Euro denominated Islamic NPCs-I will be remunerated based on expected rates and weightages announced for the month of February vide SBP Letter No SFAD/935//INPC-2023 dated Feb 1, 2023.
SBP has clarified that expected rates are just indicative in nature as actual profit rate will be calculated in line with the Islamic principle of Modaraba, based on actual results of the Modaraba pools using PSR and weightages.
It may be mentioned here that the Finance Division (External Finance Wing), vide Gazette notifications No. S.R.O. 44(I)/2023 dated January 20, 2023, has already notified the revision in rate of return for the conventional NPCs.
Copyright Business Recorder, 2023