ISLAMABAD: The government on Thursday formally launched ‘Pakistan Banao Certificates’ (PBCs) to tap into the savings of over eight million overseas Pakistanis for securing much-needed foreign exchange reserves to stabilise the country’s economy.
The PBCs were launched by Prime Minister Imran Khan at a ceremony at his office.
Urging overseas Pakistanis to come forward and enthusiastically purchase PBCs to make this scheme a success, the prime minister said: “The scheme would not only help the Pakistani diaspora to earn reasonable profit from these certificates but also contribute towards reviving the national economy at this critical juncture.”
He said the economic crisis would continue to persist unless the country’s agriculture and tourism sectors yielded desirable results.
Mr Khan said before coming to power he was not aware how bad the country’s economic situation was though he was not expecting anything good at all.
PM says Pakistanis would have faced more difficult time if government had gone to IMF
He said the government had not made any fresh deal with the International Monetary Fund (IMF), adding that if it would have gone to the IMF the people of the country would have faced more difficult time. “It was the easiest way to go to IMF for relief, as the same was done by the previous governments, but we chose the other route to go to friendly nations and ask them for assistance,” the prime minister said.
Stressing the need for robust tourism and agriculture sectors, he said Pakistan was blessed with a lot of tourist spots, including religious tourism sites of Buddhist, Hindu, Sikh and Sufi communities. “This can result in billions of dollars worth of tourism,” he added.
According to Finance Minister Asad Umar, the PBCs are available with three-year and five-year maturity period at profit rates of 6.25 per cent and 6.75pc per year, respectively.
Minimum investment size is $5,000 with no upper limit. Overseas Pakistanis having Computerised National Identity Cards, National Identity Card for Overseas Pakistanis and Pakistan Origin Card and maintaining their bank accounts abroad can invest in the PBCs digitally through a dedicated secure website (www.pakistanbanaocertificates.gov.pk).
The website has complete details of the certificates. Every investor will be issued a unique identity number and profits in US dollars will be remitted after every six months to the investor’s specified account maintained abroad.
Further incentives include exemptions from withholding tax and compulsory deduction of Zakat. Investors will also have the option to encash the certificates prematurely in Pakistani rupee without any deduction.
Prime Minister Khan said the launch of the PBCs was a step towards welfare of overseas Pakistanis as the government was committed to acknowledge and support them in recognition of their unrelenting support and love for the motherland.
The certificates also reflected the government’s commitment to ensure that development financing was diversified and made sustainable in the long-term interest of the country, he said.
The PBCs have been launched worldwide jointly by the government and the State Bank of Pakistan. The rules governing the certificates were approved by the federal cabinet on Thursday because it was the first ever transaction of its nature that targeted only overseas Pakistanis.
It will be an open-ended transaction and its size will depend on the response from Pakistanis living abroad. The transaction will build foreign exchange reserves as the country’s balance of payments needs for the current year have already been secured.
The Pakistan Tehreek-i-Insaf’s economic team had planned the PBC launch in October last year, but delayed it after Prime Minister Khan’s call for donations to the dams’ fund.
The PBCs will be payable to Pakistani investors in their accounts maintained abroad on semi-annual basis in foreign currency with the choice of local payments in local currency.
The instruments 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 are remitted through official banking channels.
The certificates are being marketed through multiple platforms, including digital, electronic and print media, starting from Jan 28, to ensure maximum outreach to potential investors. Further, road-shows and awareness sessions will be held for overseas Pakistanis in targeted countries.
It is believed that the PBCs offer more attractive returns than those available to Pakistanis abroad on instruments of similar maturity. The certificates are backed by sovereign guarantee. An official said the PBC scheme would not adversely affect normal remittances from overseas Pakistanis.
It is said to be an attractive investment opportunity for overseas Pakistanis and will enable them to fulfil their aspiration of contributing to development of the country.
Published in Dawn, February 1st, 2019