- Two financial institutions express interest
KARACHI: A brace of financial institutions have expressed interest in investing in the Overseas Pakistanis Savings Certificates (OPSCs), the Central Directorate of National Savings (CDNS) intended to tap into Pakistani diaspora in a bit to raise foreign exchange deposits. The CDN expects to raise around $1 billion in its maiden endeavour.
Sources said the financial institutes have a presence in Pakistan, and the names would be disclosed within a week. The closing date to submit the bids was April 30, 2018.
CDNS Director General Zafar Masud said Tuesday, “Overseas Pakistanis can buy these certificates with $1,000. Offered in both dollars and rupees, the certificates will be scrip-less.”
The financial expert said the rate of return was likely to fall in between six and seven percent, and the CDNS would launch the certificates before the close of this fiscal year. “Initially, the certificates will be launched in the Gulf Cooperation Council market and in phases later in other countries,” he added.
The savings certificate would be the best option for overseas Pakistanis due to the higher returns as compared to the rate offered by international, as well as domestic banks.
“There is a great potential and expected investment from expatriates within the first year may raise $500 million to $1 billion,” the DG said, adding, CDNS recognises overseas Pakistanis as a powerful resource for the national development and has designed the unique product to target the savings coming from informal channels.
“We are on target and (are) likely to complete the assessment of financial bids received from highly reputed international and local financial institutions within the stipulated timeframe,” he added.
The proposed tenure would be three and five-year with quarterly/semi-annual profit disbursement. “As their financial and legal advisers for the structuring of the proposed certificates, National Savings had already appointed a consortium of EY (Ernst and Young), Haidermota and Co, and Al Tamimi and Co,” Masud said.
The CDNS is a premier financial institution, offering retail government securities and savings products as national savings schemes attractive to small savers through a diversified product mix.
The CDNS has an investor base of seven million portfolio, which is around 30 percent of the total banking deposits of nearly Rs12 trillion. Its share in the domestic government debt is around 19 percent. Most of its products are designed for low-income segments of the society.
In the first nine months of the current fiscal year, the remittances from overseas Pakistanis were country $14.6 billion – marginally up by four percent over the corresponding period during the last fiscal.
The inflows from informal Hundi and Hawala channels still form a considerable chunk despite the government’s initiatives to give tax and exchange rate benefits to encourage remittances through banking channels.
