The government has introduced Shariah-compliant regulations to enable resident and non-resident Pakistanis to invest in foreign currencies through Islamic Naya Pakistan Certificates (INPCs).
These new Islamic certificates will attract investment from overseas and locals who own assets abroad to build up Pakistan’s foreign exchange reserves and support its cash-strapped economy.
Non-resident Pakistanis with an account at a local bank under the Roshan Digital Account (RDA) and resident Pakistanis, who have declared assets abroad with the Federal Board of Revenue (FBR), can invest in the three-month to five-year long Shariah-compliant saving certificates both in foreign currencies (mainly US dollar) and Pakistani Rupees.
Eight local banks, including the Habib Bank Limited, MCB Bank, Meezan Bank, Faysal Bank, Standard Chartered Bank, Bank Alfalah, Samba Bank and United Bank Limited, have formally launched these new INPCs. These banks will establish two Shariah-compliant assets (Mudaraba pools) worth $20 million and Rs5 billion.
Although these banks will be eligible to share the profits as per the profit sharing ratio agreed with them, their investment in the pool would be transitory in nature and they would quit after the individual (Pakistani resident and non-resident) provides receipt of the individual investments in INPCs to the federal government.
Moreover, the investing resident or non-resident Pakistani can sell their certificates prematurely, withdrawing investment to their foreign accounts, at any time after one-month of making an investment in the saving certificates with three-month to five-year tenures.
Rates for return on investment for these Islamic certificates will be close to the ones offered by the conventional Naya Pakistan Certificates (NPCs).
The government is offering annualized return of 5.5% on three-month certificate, 6% on six-month certificate, 6.5% on 12-month, 6.75% on three-year and 7% on five-year saving certificate on investment in foreign currencies in NPC.
Whereas, for local rupee investment, the annualized return of 9.5% on three-month certificate, 10% on six-month certificate, 10.5% on 12-month, 10.75% on three-year and 11% on five-year saving certificate will be offered.
INPCs will attract huge investment because Shariah-compliant investment and banking has been in demand for a long time.