KARACHI, Sept 30: PICIC announced on Monday that it was launching a new deposit scheme, purely as a social service product, which would yield 12 per cent per annum on money parked by widows, orphans, retired civil and armed forces personnel and senior citizens.

Managing director Mohammad Ali Khoja told Dawn that PICIC would begin collecting deposits under the “PICIC special deposit certificate” scheme from October 1 and the validity of scheme would be up to December 30.

He said that Rs1,000 per month would be paid as profit on investment of Rs100,000; minimum investment per person would have to be Rs60,000 and maximum Rs300,000; maximum investment per family would be limited to Rs500,000; profit payment would be made on 1st day of every month through nearest branch where account has been maintained; financing (loan) would be available against deposit and the period of deposit would be five years.

Khoja claimed that he was offering an attractive yield in a declining interest rate scenario. He said that it would cost PICIC 12.75 per cent per annum and admitted that investment of those deposits would not give the corporation adequate spreads. But he said that the Corporation had decided to bear the loss in the interest of social welfare.

The PICIC MD said that the corporation would monitor the deposit trend up to the validity date of December 30 and would put a stop-loss order at a certain level of deposit. He said the corporation did not require the SBP approval or the sanction of the PICIC board to launch the deposit certificates.

To a query, Khoja said that as the scheme stands currently, withholding tax would be deducted from the profit paid to depositors, but that he was working with the concerned government department for a waiver and some special relief, given the nature of the deposit scheme.

When quizzed how his Corporation would determine the eligibility of depositor for all men get to be orphans at some point in time, PICIC MD said, his people had devised methodology to determine, when an orphan is really an orphan.