ISLAMABAD: Millions of Pakistanis living abroad earn over $ 50 billion as disposable income out of which only $ 20 billion is sent back to home in the name of remittances while remaining $ 30 billion are either sent to Pakistan via illegal channels or invested in the foreign countries.
This was claimed by Directorate of National Savings (CDNS) Director General Zafar Masood while informing Senate Standing Committee on Finance and Revenue about the first-ever plan to target remittances through “Overseas Pakistanis Savings Certificates” (OPSCs) on Thursday. The meeting was chaired by Saleem Mandviwalla.
The National Savings DG claim that as per estimates, at least $ 15 billion is sent back to the country by overseas Pakistanis via illegal channels to be mostly invested in real estate sector, while the rest of $ 15 billion is invested in the foreign country. “Our target is to provide an opportunity to overseas to invest in Pakistan through safe and legal means. We would be offering better returns as compared to other bonds available to non-resident citizens of Pakistan abroad,” he said.
“Inquiries about investment and cash handling by Pakistanis in various foreign countries have increased following overall stiff regulation on the transaction. Pakistanis are facing more queries about their money abroad,” Zafar claimed, adding that the Diaspora bond will provide an opportunity to the overseas to invest and get better returns.
Initially, CDNS expects an investment of $ 550 million to $ 1.2 billion per year through the OPSCs being launched soon. Pakistan was 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.
According to him 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 channelized in Pakistan currently and held back in the resident countries of the Overseas Pakistanis.
Such initiative will provide Overseas Pakistanis with an attractive opportunity to park their hard-earned savings in more reliable and secure government-backed security 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.
The product is proposed to be offered in both Foreign Currency and Pakistan Rupees with a tenor of 3 and 5-year with monthly profit.
Zafar Masood said keeping in view the regulatory requirements 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 initial investment in the range of $ 550 million and $ 1.2 billion per annum, calculated on the basis of 1/4th of 4.5 million Overseas Pakistanis living in the initial target market (GCC) if each invests a mere $ 500 in this product in a year.