State Bank of Pakistan launched Pakistan Banao Certificate (PBC) on January 31 to offer safe and secure investment opportunity to overseas Pakistanis.
Finance Minister Asad Umar revealed that PBC certificates will come in 2 maturities. The first is for 3 years that will offer 6.25% return. The second one will offer 6.75% return on the 5 year maturity. He further added that 4 banks are selected to accomplish the transaction.
According to one Finance Ministry official, PBC will be launched globally by the government of Pakistan in accordance with SBP. PBC can be purchased either individually or jointly by the overseas Pakistanis having banks account abroad.
Aims and objectives of PBC
The main aim is to offer the Sovereign investment avenue to this large community. However, the scheme will not just benefit overseas Pakistanis but will also assist in the enhancement of foreign exchange reserves and the payment support balancing. The fund will be also utilized in the infrastructure and development of Pakistan. It will be used in the construction of road networks, dams, and projects related to the transmission and power generation.
World is now turned into the global village and a significant number of people are residing outside their home countries for better jobs, education, lifestyle, etc. Pakistani immigrants are also living all around the globe. It is believed that overall Pakistani immigrants are the 6th biggest diaspora.
There are around 8.5 million overseas Pakistanis in the world. In just United States, number of Pakistani immigrants are 0.5 million. The large community of overseas Pakistanis is significantly contributing in the progress and development of Pakistan. They send USD 20 billion remittances each year to Pakistan and stay connected with their country through the investments, personal involvement, and philanthropy.
Key Features of PBC
Government of Pakistan is the issuer of PBC and also providing the Sovereign Guarantee. To be eligible for this scheme, the investor should be a Pakistani with the valid NICOP / CNIC. POC holders can also invest in this scheme who have bank accounts outside Pakistan. The minimum investment required in PBC is US $5,000 as its currency of issue is US Dollar. The investor can further make investment in the integral multiples of US$1,000 without any maximum investing limit.
Complete Procedure to invest in PBC
Here is the complete procedure that the investor should follow to make investment in PBC:
- Step 1:The profile should be created after accessing the portal https://www.pakistanbanaocertificates.gov.pk
- Step 2: The registration is subjected to the POC / NICOP / CNIC verification.
- Step 3: In next step, investors should add their investment request and the details about bank account.
- Step 4: After the submission of all key details, investors will receive the unique reference number that they can use to remit the funds to the PBC Bank Account at National Bank of Pakistan (NBP) New York branch.
- Step 5: It is noted that investors just utilized their own designated bank accounts to remit funds.
- Step 6: In the next step, the screening of investor will be done through the Office of Foreign Assets Control (OFAC), European Union (EU), Bank of England (BOE), and United Nations Security Council (UNSC) list for the clearance.
- Step 7: Funds of just those investors will be accepted who will clear the above mentioned screening process.
- Step 8: At the end, SBP will issue PBC and will inform the investor after the confirmation of receipt of funds.
Investors can get information about their investment application through PBC Portal when they login through the User ID and Password. The procedure is completely paperless and will take just 5 to 7 minutes.
The certificate will be issued to investor after the completion of above mentioned process. However, following details will be confirmed at the registered e-mail address of investor as part of electronic confirmation, and his/her account on the PBC Web Portal will be updated:
- Investor’s IPS Account
- Investment details in certificates including amount, profit payment schedule, maturity date, certificate number, issue date etc.
Details of SBP correspondent bank and account numbers for PBC
Here are all key details about SBP account where funds should be remitted from investor’s personal bank account.
SBP Correspondent Bank
Bank Name and Address: National Bank of Pakistan New York, USA
SWIFT Code: NBPAUS33
Account Details for 3 Years Certificate
Account Title: SBP Account for PBC – 3 years
Account Number: 5580-4584
Account Details for 5 Years Certificate
Account Title: SBP Account for PBC – 5 years
Account Number: 5580-4585
Beneficiary’s Name: State Bank of Pakistan
Beneficiary’s Address: I.I. Chundrigar Road, Karachi, Pakistan
Beneficiary’s SWIFT Code: SBPPPKKA
Procedure of Periodic Payments
i. Periodic Profit Payments
PBC is based on periodic profit payments. The profit will be paid in US Dollars on the bi-annual basis and will be determined from the date on which certificate is issued. The shut period (5 working days) will be observed before the due date of periodic profit payment.
ii. Premature Encashment
The option of Premature Encashment of investment in PKR or USD will be available to investor. However, the request should be made through the PBC Web Portal.
iii. Redemption at Maturity
The principal amount (USD) will be directed to the personal account of investor on the maturity date. However, for redemption in Pakistani Rupees, the investor will have to submit redemption request minimum 10 working days before the maturity date.
Key Reasons for investment in PBC
Investors usually look for high profit in any investment certificate. The profit on PBC is much higher than other bonds. PBC is offering 6.25% and 6.75% profit (semi-annually) for 3 years and 5 years respectively. However, US bonds are offering 2.49% and 2.875% for the same time period. On the other side, KSA bonds are giving 2.89% and 3.5-4.0% for 3 and 5 Years respectively.
PBC gives profit on bi-annual basis which means that investors will get profit twice a year. The certificate is offering maturity not just in US Dollar but also in Pakistani Rupees. Another significant feature is that the PKR maturity will provide the additional incentive of 1% on final premium.
PBC can be en-cashed on any occasion. However, 1 percent penalty or levy will be charged in case of encashment in USD during first year of issuance. Investors can submit the encashment application online through the PBC portal’s redemption module. The periodic Profit and redemption proceeds will be directed to the accounts of investors that they were designated during the time of investment.
Pakistan Banao Certificate is a great initiative by State Bank of Pakistan and the federal government. Its high profit rate as compare to other bonds by United States and Saudi Arabia will surely attract the investors. The success of this scheme will not just secure the investment of overseas Pakistanis but will also increase the foreign exchange reserves of Pakistan.