Govt collects $30m from Pak expats under Pakistan Banao Certificate

ISLAMABAD: After receiving a lukewarm response on two major initiatives for raising funds, the total collected amount of Rs10.9 billion through PM and Chief Justice of Pakistan Fund for Diamer-Bhasha and Mohmand dams has been invested into the treasury bills (TBs) for earning around 14 percent mark-up.

With regard to second initiative in the shape of Pakistan Banao Certificate (PBC) for luring investment from Pakistani diaspora living abroad, the PTI-led government has so far collected roughly $30 million, so this scheme also failed to attract desired number of the potential investors.

Special Secretary Finance and official Spokesman Umar Hameed said that PBC is script-less issue which does not require any extension. “The scheme is continuing,” said the Finance Ministry spokesman, and added that only advertisement campaign ended on June 30, 2019.

Top officials of the State Bank of Pakistan (SBP) said about the dams fund that the total collected amount stood at Rs10.9 billion and on the direction of the Supreme Court of Pakistan, they were given instruction to invest this amount into the government’s TBs through the National Bank of Pakistan (NBP). “Now the additional funds collected for dam funds were invested into TBs,” an official,and added that there was no usage of funds if it remained idle into account of the SBP. The investment into TBs is totally guaranteed and risk-free so it was decided to use this avenue to earn mark-up at a time when the banks were earning good margins because of higher interest rates.

The government’s borrowing has shifted from the central bank to commercial banking under the IMF conditions so the rate of T-bills are quite attractive because the bankers also knew that the government had become desperate borrower to finance its fiscal deficit.

On PBC, the government had fixed profit rate of 6.25 percent and 6.75 percent on three and five years respectively. “So far the government had attracted around $30 million,” said a top official of the government.

The government could not launch PBC abroad at major destinations because the Finance Ministry could not manage required permission from regulatory regimes of the US, the UK and other important capitals where majority of Pakistanis were living.

However, the sources said that there has been no vigorous campaign to lure investment into PBC and no one knows what the government was thinking to make this scheme attractive for overseas Pakistanis.

At a time when Pakistan is desperate to increase its foreign currency reserves under the IMF condition, the PBC-like scheme could become a good source of jacking up dollar inflows in months ahead.