Islamic Naya Pakistan Certificates Provides Exceptional Halal Returns

Islamic Naya Pakistan Certificates (INPCs) offer attractive investment opportunities with ease and convenience through simple online process. The Islamic Naya Pakistan Certificates (INPCs) are issued by Government of Pakistan, for Roshan Digital Account holders.

It is pertinent to mention that only Non-Resident and Resident Pakistanis who have declared their assets held abroad in the latest tax returns can now invest in the Islamic Naya Pakistan Certificates (INPCs) and secure high returns.

Furthermore, the Resident Pakistanis with declared assets abroad can only invest in GBP, Euro and USD denominated certificates provided by the Government of Pakistan.

What are Naya Pakistan Certificates?

Naya Pakistan Certificates (NPCs) are USD, PKR, Euro and British Pound-denominated sovereign instruments issued by the Government of Pakistan. NPCs offer attractive risk-adjusted returns over different maturities. They are available in both conventional and Shariah compliant versions and administered by the State Bank of Pakistan.

Profit Rates

The Certificates offer the following attractive annualized rates of return:

Main Features

• Different Tenors:
  • 3, 6, 12 month
  • 3, 5 year
  • Early encashment allowed
• Simple Tax: For NRPs, no tax filing, only 10% withholding tax on profits
• Shariah Compliance: Both conventional and Shariah compliant certificates are available
• Fully Repatriable: No approvals required for remitting funds abroad

Islamic Naya Pakistan Certificates (INPCs)

These are the Shariah Compliant Version of the Naya Pakistan Certificates, which have the following features:

• INPCs are based on a Mudaraba structure whereby the investor invests in a Mudaraba pool that is used to extend Shariah compliant financing to the Federal Government.
• Investment is remunerated from the profits earned by this pool.
• For this purpose, Federal Government has created a special purpose vehicle, Islamic Naya Pakistan Certificate Company Limited (INPCCL) fully owned by it.
• This company is housed and managed by the State Bank of Pakistan (SBP) on the basis of a mandate given by the company’s Board.
• Since INPCs are offered in USD, GBP, Euro and PKR denomination, the company maintains separate Mudaraba pools for each respective currency i.e. USD, GBP, EURO and PKR.

How Can You Invest in NPCs?

Open a Roshan Digital Account

• Non-Resident Pakistanis (NRPs) can invest in NPCs through their Roshan Digital Account which they can open online in a completely presence-less manner, without the need to visit any bank branch in Pakistan, or an embassy or a consulate. The account can be opened in PKR or foreign currency, or both. (Click here for details on how to open an account)
• Resident Pakistanis who have declared assets abroad with FBR can invest in USD-denominated NPCs. To do so, they can open a Roshan Digital Account in foreign currency by visiting a bank branch in Pakistan. (Click here for details)

Read more: How to open Roshan Digital Account for overseas Pakistanis.

Transfer Funds in Your Account

• After opening your Roshan Digital Account with the bank of your choice, you will remit funds from outside Pakistan through normal banking channels.
• Using the funds in your account, you can invest in NPCs.

Choose the NPC and Subscribe

• You will be able to subscribe to the certificate electronically using your bank’s online portal.
• You will need to select the conventional or Shariah-form, currency (PKR, USD, Euro or Pound), tenor (3-month, 6-month, 1 year, 3 years and 5 years), and the amount to be invested.
• The PKR-denominated NPCs can be purchased from the balance in your PKR Roshan Digital Account.

• The USD, GBP and Euro-denominated NPCs can be purchased from the balance in your foreign-currency Roshan Digital Account. If you have a foreign-currency Roshan Digital Account in a currency other than the currency of NPC you intend to purchase, your bank will debit your account by applying the exchange rate prevailing at the time of execution of the transaction.

You can visit the following banks and their websites to open your Roshan Digital Account:

• Bank Alfalah
• Bank Al Habib
• Bank of Punjab
• Dubai Islamic Bank
• Faysal Bank
• Habib Bank Limited (HBL)
• Habib Metro
• Muslim Commercial Bank (MCB)
• Meezan Bank
• Samba Bank
• Standard Chartered
• United Bank Limited (UBL)

Frequently Asked Questions regarding Islamic Naya Pakistan Certificates (INPCs)

Q1: What is a Naya Pakistan Certificate (NPC)?

Naya Pakistan Certificate (NPC) is a fixed income security offered digitally by Government of Pakistan under NPC Rules 2020 framed under Public Debt Act, 1944. It is a sovereign security denominated in US Dollars, and Pak Rupees issued with full faith and credit of the Government of Pakistan. The NPCs are available in five maturities, namely, 3-month, 6-month, 12-month, 3-year and 5-year, and carry following profits rates per annum (p.a):

Q2: What is Profit Payment Frequency?

The profit on 3-month, 6-month and 12-month NPCs shall be payable on maturity, whereas the profit on 3-year and 5-year shall be payable to the investors on semi-annual basis.

Q3: Is investment in NPCs Safe and Guaranteed by Government?

Yes! NPCs are sovereign instruments, issued with full faith and credit of the Government of Pakistan.

Q4: Who can invest in NPC?

Non-resident Pakistanis having National Identity Card for Overseas Pakistanis (NICOP) or Pakistan Origin Card (POC ), and resident Pakistanis having declared assets abroad, are eligible to invest in NPCs through Foreign Currency Value Account (FCVA) and Non Resident Pakistanis Rupee Value Account (NRVA) account being marketed by agent banks as Roshan Digital Accounts (RDAs). Opening a Roshan Digital Account with one of the agent banks is a pre-requisite for investment in NPCs.

Q5: Can a minor invest or co-invest in Naya Pakistan Certificate (NPC)?

Yes, a minor can invest in NPCs provided he/she meets the eligibility criteria mentioned in Q4 above. The parents or the guardian shall operate all the transactions on behalf of the minor until the minor is of eighteen (18) years of age.

Q6: What is the minimum and maximum investment limits for NPC?

The amount of Investment in USD, PKR, GBP and Euro denominated certificate is as under:

Q7: Is Premature Encashment of NPC Permissible?

Yes! Premature encashment of NPCs is permissible. The investors can redeem his/her investment fully or partially, before the maturity date. Premature encashment proceeds shall be calculated at the rate of return equivalent to the return of the nearest shorter maturity of Certificates. For example, an investor of a 12-month NPC withdraws his/her investment in the 8th month of holding, in this case, he/she will be entitled to profit for the period up to date of premature encashment, fixed at the rate of return applicable on 6-month NPCs.

However, no profit shall be paid in case of encashment of certificates before completion of 3 (three) months. Moreover, partial encashment below the minimum investment amount (i.e. USD, GBP and Euro 5,000 or PKR 100,000) is not allowed.

Q8: Which are the Agent Banks for Sale of NPCs?

Currently following banks have been engaged by the Government of Pakistan for sale and marketing of NPCs:

The investors can open Roshan Digital Account in any of these banks for investment in NPCs. State Bank of Pakistan shall notify any addition/change in the above list of agent banks as and when new banks are added by GOP as agent banks.

Q9: Can an investor having FCY RDA in other than USD invest in USD denominated NPC?

Yes! If an investor is maintaining his/her FCY RDA in any approved foreign currency with agent banks, he/she can invest in USD denominated NPCs. In such cases, the agent bank shall debit the investors’ account by an amount equivalent to the amount of investment requested in USD denominated NPCs by applying the exchange rate prevailing at the time of execution of the transaction. Similarly, the investors having FCY RDA in currencies other than GBP and Euro can invest in GBP and Euro NPCs.

Q10: In which account the investors will get the funds on maturity/premature encashment or periodic Coupons?

The funds on maturity, on premature encashment, and the periodic coupon payments (where applicable), will be credited in the investor’s RDA only.

Q11: Whether NPCs are subject to Zakat deduction?

No! NPCs are exempt from zakat deduction as per the NPC Rules, 2020.

Q12: Whether return on NPCs are subject to tax deduction?

Yes! The return/profits on NPCs are subject to 10 percent withholding tax as full and final settlement of tax liability on NPC profits. The non-resident investors are also not required to file any tax return if their only source of income in Pakistan is profits earned on NPCs and other investments including stock market, mutual funds and real estate.

Q13: Are NPCs Pledge-able as Security/Collateral to Obtain loans in Pakistan?

Yes! As per the NPC Rules, 2020, the Certificates can be pledged as security for raising financing subject to such conditions as may be prescribed by the State Bank of Pakistan.

Q14: Are NPCs transferable?

No! The NPCs are non-transferable except, if required under the relevant laws.

Q15: What will happen to the investor’s funds in case of his/her death?

In case of death of an investor, the payment (principal and profit, if any), will be made to the legal heirs of the deceased investor in accordance with the succession certificate or equivalent documentation in accordance with the law for the time being in force.

Q16: Does the investor needs to visit Pakistan for encashment of NPCs?

No! The investor can invest, and redeem the NPCs digitally by visiting the web portals of his/her respective agent bank.

Q17: Are NPCs also available in Shariah Compliant Version?

Yes! The Shariah compliant version of NPCs i.e. Islamic Naya Pakistan Certificates (INPCs) are also available!

Q18: What is the Shariah structure of Islamic Naya Pakistan Certificates (INPCs)?

The INPCs are being issued under the Shariah Structure notified by Finance Division Government of Pakistan under NPC Rules 2020. An SPV namely Islamic NPC Company Limited (INPCCL) has been registered with SECP as a fully Government of Pakistan (GOP) owned entity. The SPV is collecting funds from Investors on Mudaraba basis and providing the funds so collected from investors to GOP on Ijarah (Leasing) basis. The Shariah structure has been approved by Shariah Advisory Committee of the State Bank of Pakistan. Furthermore, the Shariah Advisor of SPV will provide Shariah advice/guidance on ensuring Shariah compliance in execution of INPCs and its operational matters. The full Shariah structure notified by Finance Division GOP can be seen at (https://www.sbp.org.pk/acc/2020/C7-Annex-A.pdf).

Q19: What are the Expected Rates of Return on Islamic Naya Pakistan Certificates (INPCs)?

The expected rate of return on INPCs of different tenors are the same the rates being offered on conventional. There is, however, no guarantee that INPCs will be remunerated on these rates as profits on INPCs will be paid based on the actual results of USD and PKR pools being managed by SPV for issuing the INPCs. The Profit Sharing ratio between SPV as Mudarib and Investors as Rabbul Maal and weightages for different tenors of INPCs have also been notified by SPV and will be updated on monthly basis.

Q 20: Is premature encashment of Islamic Naya Pakistan Certificates (INPCs) Permissible?

Yes! The INPCs can be encashed prematurely, but only after one month of investment. The INPCs encashed after one month but before 3 months will be remunerated based on the actual return of the Mudaraba pool. The SPV will however purchase the INPCs from investors at a discounted price based on the redemption table to be notified by SPV. The INPCs encashed after three months shall be remunerated based on the weightages applicable to the nearest completed tenor INPCs. Example: If a 36-month INPC is prematurely encashed before 12 months, the profit shall be calculated based on the weightages applicable to six month INPCs, whereas, the weightages applicable on 12-month INPCs shall be used if redeemed after 12-months. The coupon payments earlier made based on the higher weightages, shall be adjusted by applying appropriate discount on the purchase price to ensure that the investor earns profits based on the weightages of the nearest completed tenor.

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