September 11, 2020 (MLN): The State Bank of Pakistan (SBP) on Thursday, notified the detailed SOPs for investment in scrip less Naya Pakistan Certificates.
With regards to certificates offering and procedures, SBP notified that the Certificates shall be subscribed by eligible individuals (as defined in Rule 3 of NPC Rules, 2020) through Foreign Currency Value Account (FCVA) or NRP Rupee Value Account (NRVA), being marketed as Roshan Digital Accounts (RDAs) by the agent banks.
The agent banks shall be responsible for Know Your Customer (KYC), Customer Due Diligence (CDD) and Enhanced Due Diligence (EDD) of the investors.
The Certificates shall be offered digitally through the web-links of 8 banks namely; Bank Alfalah, Faysal Bank, HBL, MCB, Meezan Bank, Samba Bank, UBL and SCB Pakistan.
The denomination will be in both USD and PKR, thus, investors shall have the option to subscribe either PKR denominated or US Dollar denominated certificates of 3-Month, 6-Month, 12-Month, 3-Year and 5-Year tenors.
The minimum investment of USD 5,000 with integral multiples of USD 1,000 is required for US Dollar Denominated Certificates, whereas, for PKR Denominated Certificates, the minimum investment of PKR 100,000 with Integral multiples of PKR 10,000 has been set.
The Certificates of 3-month, 6-month, 12-month, 3-year and 5-year tenors in US Dollar Denomination shall be yielding gross returns of 5.5%, 6%, 6.5%, 6.75% and 7% of the principal amount respectively, whereas, in PKR Denomination, these certificates will provide gross returns of 9.5%, 10%, 10.5%, 10.75% and 11% respectively.
The 3-Month, 6-Month and 12-Month tenor certificates shall be single-coupon securities on which principal and profit shall be paid on maturity or on premature encashment. Whereas, 3-Year and 5-year certificates shall be coupon securities, on which periodic profit payment shall be paid on half-yearly basis.
The Investor will place the order to subscribe the certificate electronically by visiting the NPC webpage of their respective agent bank and giving investment details including currency, tenor and the amount to be invested.
The PKR denominated NPCs can only be purchased from the balances in the investors’ NRVAs whereas USD denominated NPCs can be purchased from the balances in the investors’ FCVAs. For the investors having their FCVAs in currency other than USD, the banks 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.
The agent banks shall, after debiting the investor’s account with an amount equal to the amount of his/her investment order, consolidate the orders received from FCVA or NRVA holders during a working day till 1:00 p.m. Pakistan Standard Time (PST), and shall transmit the same to the SBP through SBP’s Data Acquisition Portal (DAP) by 2:30 p.m. (PST) the same day.
In case of purchase of US Dollar denominated certificates, agent banks have two options to remit the purchase value of certificates to State Bank of Pakistan (SBP) either through their USD Clearing Account maintained with SBP, or through transfer of funds to the nostro account of SBP maintained with the Federal Reserve Bank of New York, New York, USA.
In case of purchase of Pak Rupees denominated certificates, agent banks shall authorize SBP to debit the total purchase value of these certificates from their Pak Rupees account maintained with the SBP and issue the Naya Pakistan Certificates of aforesaid maturities per contra credit to the respective bank’s SGLA account (IPS holding).
After debiting the USD Clearing Account (or Pak Rupees current account) of the concerned bank, SBP shall issue the Certificates on the same day on which the order is placed through the Subsidiary General Ledger Account (SGLA) by affording requisite credit to the IPS holding account thereof. However, where the purchase value of the order is remitted to the aforesaid nostro account of SBP, Certificates will be issued on T+1 basis in the like manner.
Furthermore, SBP also revealed the procedures of periodic payments on Coupons and premature encashment.
The periodic coupon payments shall be made on six (6) monthly basis only in respect of Certificates of 3-year and 5-year maturities in their respective currencies.
The six (6) months for the periodic coupon payment shall be determined from the date of issuance of the certificates. For example: if certificates are issued on 10th September 2020, the profit payments shall be made on 10th March 2021 and on subsequent six-monthly dates accordingly.
SBP shall make the periodic coupon payments (net of deduction of tax as specified in Rule 18 of the NPC Rules, 2020) on their respective due dates by crediting the USD Clearing account of the bank, or as the case may be the PKR current account, with advice to the bank concerned for onward credit to the investors’ FCVA or NRVA on the same day.
In the event of failure of the bank to credit the amount in the investor’s account, despite receipt of credit from SBP in its account (US Dollar clearing account or PKR current account), the bank shall be liable to make the investor good by paying compensation for the delayed period at the coupon rate as may be applicable to the respective Certificates.
The premature encashment shall be allowed provided that the rate of return on premature encashment shall be equivalent to the rate of return of the nearest shorter tenor certificate or any rate notified by Finance Division from time to time. No profit shall be paid in case of encashment before completion of three months.
SBP shall afford credit in the USD Clearing account or PKR current account of commercial bank the net encashment proceeds on T+2 working day basis, where T is the date of submission of request by agent bank.
The requesting bank shall credit the FCVA or NRVA of investor on the same day on which it receives credit from the SBP in its account, failing which the bank shall be liable to make the investor good by paying compensation for the delayed period at the same rate as may be applicable to the encashed NPC.
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