The federal government is to issue dollar-denominated scripless Pakistan Banao Certificate (PBC) for resident and non-resident Pakistanis to generate funds to build the depleting foreign exchange reserves and support the balance of payment.
Industry sources told Business Recorder Wednesday that the certificate is most likely to be issued in two (2) maturities, ie, 3-year and 5-year, bearing an estimated coupon rate of 5 percent and 5.5 percent respectively and payable in USD on semi-annual basis in the investors' nominated dollar account maintained overseas.
Pakistan is facing serious pressure on external account due to lower inflows and massive external debt obligations. Despite some $2 billion placement by Saudi Arabia with Pakistan for one year, the State Bank of Pakistan's foreign exchange reserves continue to decline, reaching $8 billion at the end of last week.
Sources said the issuance of PBC certificates is also an effort to generate funds to build the depleting foreign exchange reserves. The government has also promulgated Pakistan Banao Certificate (PBC) Rules, 2018, under which the government intends to issue dollar-denominated scripless certificates in which Pakistani individual having Computerized National Identity Card (CNIC), National Identity Card for Overseas Pakistani (NICOP) or holders of Pakistan Origin Card (POC) will be eligible to invest, either individually or jointly.
They said that resident and non-resident Pakistanis having bank account outside Pakistan can obtain these certificates. It will be mandatory that the funds for purchase of certificates must originate from the investor's own account or joint account maintained abroad and remitted through official banking channel.
Sources said that these certificates will provide an attractive investment avenue to Pakistani diaspora besides enabling them to contribute to the development of the country at this important juncture.
The government intends to issue the certificate, through a web portal in scripless format, duly registered in subsidiary general ledger account of government securities maintained at the State Bank of Pakistan.
The certificate will be advertised on multiple platforms including digital, electronic and print media to ensure maximum outreach to potential investors. Further, road-shows, awareness sessions, etc, will also be held for the overseas Pakistanis in the target countries.
The SBP intends to engage the services of banks operating in Pakistan, particularly those having strong presence in the target countries to market, advertise and promote the certificates through multiple channels.
The SBP has invited all banks operating in Pakistan and having overseas presence through branches, subsidiaries, parent organization, etc, to submit their expression of interest to undertake the services for SBP either individually or jointly with some other banks by December 31, 2018. Regulatory approvals for marketing of 'Pakistan Banao Certificate', marketing and advertisement road-shows targeting Pakistanis will be the responsibility of the interested bank.