SBP Raises Profit Rates on NPC Rupee Bonds

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KARACHI: The central bank on Monday raised the profit rate on rupee-denominated Naya Pakistan Certificates (NPC) savings bonds for overseas Pakistanis. The yield rate on three-month certificates rose from 5.50% to 15%, according to a circular issued by the State Bank of Pakistan (SBP).

The rate on CNP for a six-month period is set at 15.25%, an increase of 5.25% over the previous rate. The profit rate of a one-year certificate increased by 5% to 15.50%. The rate on a five-year certificate jumped from 2.50% to 13.50%, while the rate on a three-year NPC rose from 3.25% to 14%.

“Better late than never. While we were saying to bring rates in line with market yields, SBP finally raised rates on the Naya Pakistan Rupee certificate,” said Muhammed Sohail, CEO of Topline Securities.

Pakistan received $5.0 billion in inflows through the Roshan Digital Account (RDA) in two years. The total amount invested through NPCs from September 2020 to the end of August 2022 was $3.185 billion, including $1.667 billion invested in conventional NPCs and $1.518 billion in Islamic certificates. NRPs made $43 million in stock market investments.

The RDA program, which was launched in September 2020 to provide expatriates with access to the local financial market, is becoming increasingly popular among Pakistanis living abroad in all parts of the world. The government received more GDR inflows than it received from the International Monetary Fund (IMF) bailout and friendly states, which is a good thing.

After the completion of the combined seventh and eighth reviews of the Expanded Financing Facility last month, the IMF released $1.16 billion to Pakistan, bringing total program revenue to $3.9 billion.

Also, by investing in certificates and stock market, RDA provides a very good option for Overseas Pakistanis to purchase property under its Roshan Apna Ghar feature as Overseas Pakistanis help relatives in Pakistan to buy property easily, according to bankers.

Overseas Pakistanis are getting huge foreign exchange earnings, as they buy property in Pakistan for themselves or their relatives through RDA Apna Ghar. The value of the property would also appreciate in the future.

The SBP is striving to introduce the Roshan Corporate Account in the near future to provide improved facilities for overseas Pakistanis to do business and invest in Pakistan. The banking regulator is also working to launch products such as pension, insurance and Takaful under RDA.

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