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April 15, 2018

Govt invites lead manager to mobilise $1bln savings from expats


April 15, 2018

KARACHI: Government on Saturday invited local and foreign banks for the appointment as lead manager to mobilise up to one billion dollars from Pakistan’s expatriates via savings certificates scheduled before the end of the current fiscal year.

“Well reputed national and international banks either single or jointly for appointment of manage to the issue has been invited while application could be received in sealed bids by latest April 30, 2018 for the appointment of overseas certificates,” a request for proposal’s document of the Central Directorate of National Savings (CDNS) said.

Zafar Masud, director general of CDNS told the News that overseas Pakistani savings certificates (OPSCs) are aimed to launch before the close of this fiscal year. Initially, the certificates will be launched in the Gulf Cooperation Council market and later they would be launched in other countries in different phases.

“National Savings has already appointed a consortium of EY (Ernst and Young), Haidermota and Company and Al Tamimi and Company as their financial and legal advisers for the structuring of the proposed certificates,” Masud said. “We hope to raise between $500 million and $1 billion in the first year of the launch.”

The certificates are the country’s first-of-its-kind risk-free security to channelise investments from overseas Pakistanis and a third party will manage the operational aspects of the certificates.

CDNS recognises overseas Pakistanis as a powerful resource for the national development and has designed the unique product to target the savings, which are coming from informal channels.

The country received $14.6 billion in remittances from overseas Pakistanis in the first nine months of the current fiscal year, marginally up four percent over the corresponding period a year earlier.

The inflows from informal channels of Hundi and Hawala still form a large chunk despite government’s remittance initiatives to give tax and exchange rate benefits to encourage remittances through banking channels.

The new savings certificates are proposed to be offered in both the dollars and rupees equivalent certificates. The proposed tenor will be three-year and five-year with quarterly/semi-annual profit payments. It is clarified that overseas Pakistanis will subscribe in this product in foreign currency, whereas transactions will cleared in dollars. The minimum investment overseas Pakistani could make is $1,000 and Rs50,000, while profit will be disbursed in customer’s bank account in his country of residence or of choice.

“Certificates will be scrip-less and offered in both dollars and rupees,” Masud added.

CDNS is a premier financial institution offering retail government securities and savings products (known as national savings scheme), level playing field to small savers through diversified product mix.

The institution has investor base of seven million and portfolio, which is around 30 percent of total banking deposits of nearly Rs12 trillion. Its share in domestic debt of government is around 19 percent. Most of its products are designed for low-income segments of the society.

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