Islamic Naya Pakistan Certificates enter final stages
The issuance of a planned Islamic Naya Pakistan Certificates (NPC) is in advance stages and it will likely be launched after the government approves the Shariah structure of the instrument, the central bank's official said.
The investment in the conventional NPCs by the individuals through local and foreign currency accounts under the banner of Roshan Digital Account has started from mid-September 2020. However, investors and the Islamic finance industry are looking to the government to launch the Shariah-compliant version of the NPC. "The development of the Shariahcompliant Naya Pakistan Certificate is at an advanced stage. The Finance Division is expected to notify the Shariah structure of NPC soon, after which it will become available through Roshan Digital Accounts to overseas Pakistanis and resident Pakistanis who have declared assets abroad with FBR," Abid Qamar, the spokesman for the State Bank of Pakistan told The News in an email.
"As in the case of the already issued conventional NPC, the Shariah compliant NPCs will also be scripless and issued by State Bank of Pakistan without involving Central Depository Company." Though the government was still to issue rules and procedures for investment in the Islamic NPCs, experts expect these certificates would most likely be structured on Mudarabah format.
"These certificates seem to be short-term and long-term instruments with regular profit payments with maturities," said a senior banker. "The tenor could be three-, six-, and 12-month, 3-year and 5-year or any other to be notified by the govt." Bankers expect the Islamic NPCs to be introduced in the next two to three weeks.
Azhar Aslam, a head of Islamic banking at Standard Chartered Bank Pakistan Limited said the conventional Naya Pakistan certificates offered a very attractive yield both for USD and PKR. "They will most likely attract investor interest and uptake from the Pakistani diaspora globally."
"We await information on the Shariah-complaint variant and consider launching both conventional and Shariah-compliant variants of investment products to be a positive step by the government," Aslam said.
Shariah-compliant products carried a positive sentiment and there was a considerable number of Pakistanis who would prefer to invest in such instruments only, he added.
"We welcome this initiative and request the government and the State Bank of Pakistan that in future they should launch Shariah-complaint versions of investment products so as to widen the investment base for the country," Aslam added.