Pakistan to launch diaspora bond to attract overseas Pakistani investment

CDNS seeks RFP for appointment of the Financial Advisor by November 27

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ISLAMABAD: In a new initiative to attract more foreign exchange and help the depleting reserves, Pakistan for the first time is going to launch a new bond “Overseas Pakistanis Savings Certificates” (OPSCs) with an expected investment of $ 550 million to $ 1.2 billion per year.

According to available documents, Pakistan is going to take this initiative after countries like Bangladesh, India, Sri Lanka, Philippines, Nigeria, etc., which have already responded and developed specific schemes of investment for their non-resident citizens.

As the existing remittances are largely consumption-driven, the ministry of finance through National Savings has developed a unique product named as OPSCs which aims at targeting the remittances from non-banking channels and the savings which are not channelised in Pakistan currently and held back in the resident countries of the overseas Pakistanis. As per the documents, such initiative will provide overseas Pakistanis with an attractive opportunity to park their hard-earned savings in more reliable and secure government-backed securities in their home country. It is expected that the OPSCs will send immense positive vibes throughout Pakistani diaspora spread around the globe, and will facilitate in enhancing remittances from the banking channel further. The product offering will make them feel that the government back home cares for them and is coming up with innovative solutions to safeguard their savings by providing both secure and lucrative investment platform.

The new product of National Savings especially designed for the overseas Pakistanis is envisaged to be the Pakistan’s first of its kind risk-free and script-less security for the non-resident citizens on tap basis, like all other retail products of the savings.

The product is proposed to be offered in both foreign currency and Pakistani rupees for a tenor of 3 and 5-year with monthly profit.

Keeping in view the regulatory requirement of the international markets, the product is proposed to be launched initially in the Gulf Cooperation Council (GCC) and then subsequently be rolled out in UK and USA markets and in third and final phase across the globe.

National Savings has estimated to fetch an initial investment in the range of $ 550 million and $ 1,200 million per annum. This sum is calculated on the basis that if 25 per cent of 4.5 million overseas Pakistanis living in GCC invest a mere $ 500 per year.

National Savings has floated a Request for Proposal (RFP) for appointment of the Financial Advisor(s), who will be responsible for structuring of the proposed OPSCs jointly with Central Directorate of National Savings (CDNS), analysing the taxation and legal matters in the target markets, preparing RFP for appointment of the Manager/Operator who will manage the back-office of this product, and identifying the potential agents/distributors in the target markets.

Though the CDNS had set November 17 as the last date for response to RFP, however, it has extended the date to November 27 on the request of expected financial advisers.

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