SBP raises profit rates on NPCs rupee bonds

KARACHI: The central bank on Monday increased the rate of profit on rupee-denominated Naya Pakistan Certificates (NPCs) saving bonds designed for overseas Pakistanis. The rate of return on three-month certificates increased by 5.50 percent to 15 percent, according to a circular issued by the State Bank of Pakistan (SBP).

The rate on NPCs for a period of six months is fixed at 15.25 percent, sowing an increase of 5.25 percent from the previous rate. A one-year certificate's profit rate increased by 5 percent to 15.50 percent. The rate on a five-year certificate jumped by 2.50 percent to 13.50 percent, while the rate on a three-year NPC increased by 3.25 percent to 14 percent.

“Better late than never. As we were telling to bring rates in line with market yields, SBP has finally increased rates on Naya Pakistan Rupee Certificate,” said Muhammed Sohail, the CEO at Topline Securities.

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

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

Following the completion of the combined seventh and eighth reviews of the Extended Fund Facility last month, the IMF released $1.16 billion to Pakistan, bringing the programme's total receipts to $3.9 billion.

Besides, investing in certificates and the stock market, RDA provides a very good option to overseas Pakistanis for purchasing property under its feature Roshan Apna Ghar as overseas Pakistanis are helping their relatives in Pakistan to purchase a property easily, according to bankers.

Overseas Pakistanis get huge gains in foreign exchange, while they purchase property in Pakistan for themselves or their relatives through RDA Apna Ghar. The value of the property would appreciate too in the future.

The SBP is working to introduce Roshan Business Account in near future in order to provide enhanced facilities to overseas Pakistanis for doing business and investing in Pakistan. The banking regulator is also working to launch products such as a pension, insurance, and Takaful under RDA.