Overseas Pakistanis can buy dollar saving bonds in their country

Dubai: Overseas Pakistanis will soon be able to invest in dollar saving bonds back home — a new incentive to be launched on January 31.

A senior diplomat at the Pakistan Consulate General in Dubai confirmed that the new dollar bonds called Pakistan Banao (build Pakistan) Certificate is expected to be launched by the end of this month to attract overseas Pakistanis to invest in a savings scheme.

The aim is to build the foreign exchange reserves by providing overseas Pakistanis an opportunity to save in foreign currency in Pakistan.

He said that details of the dollar bond are expected to be announced in Dubai on January 27 by Zulfiqar Bukhari, Special Assistant to Prime Minister for Overseas Pakistanis and Human Resource Development.

Though the announcement about the dollar-denominated diaspora bond was made by Pakistan’s Finance Minister Asad Umar, the idea of these bonds was actually conceived during the previous government of former Prime Minister Nawaz Sharif early last year.

According to initial details, the Pakistan Banao Certificates would be of two maturities – one of three years at about 6.25 per cent return and another with five-year maturity carrying 6.75 per cent return. Four banks had been selected to complete the transactions.

The certificates will be launched worldwide jointly by the government and the State Bank of Pakistan. The rules governing the certificates were approved by the federal cabinet on January 24 because it was the first ever transaction of its nature that targeted only overseas Pakistanis.

The economic team of the Pakistan Teheek-e-Insaf government had planned the bond launch in October last year but delayed after Prime Minister Imran Khan’s call for donations to the dam fund.

“It will be an open-ended transaction and its size would depend on the response from Pakistanis abroad,” the official said adding that while the transaction would build reserves.

Pakistan has already received first $1bn tranche from UAE out of $3bn commitment while Saudi Arabia’s $3bn has already been credited into the SBP account.

The certificates would be payable to the Pakistani investors in their accounts maintained abroad on semi-annual basis in foreign currency with the choice of local payments in local currency.

The certificates would be issued to Pakistanis with computerised national identity cards and maintaining accounts abroad, national identity cards for overseas Pakistanis (NICOP) or Pakistan origin cardholders.

The certificates can be purchased individually or jointly by the resident and non-resident Pakistanis having bank accounts abroad but it would be mandatory that funds for purchase of certificates originate from their foreign accounts and remitted through official banking channels.

The certificates are backed by sovereign guarantee.

“This is a new avenue of investment for retail investors of Pakistani origin who could not normally avail traditional commercial or Islamic bonds of higher denomination,” the official added.

Businessmen in the UAE have welcomed the new initiatives.

Shabbir Merchant, a prominent businessman in Dubai said that it is a good decision to launch the dollar certificate for overseas Pakistanis as it will not only by good for them to manage their savings but also help Pakistan get foreign exchange to build foreign reserves.

Naveed Younus, who has been working in Sharjah for the last 30-years, said that though the dollar certificate scheme looks good, they would wait for more details and security against their deposits.