The government has established a wholly-owned special purpose entity, namely Islamic NPC Company Limited (INPCCL), which shall be issuing Islamic Naya Pakistan Certificates (INPCs) denominated in USD and PKR to the agent banks and investors.
INPCCL shall establish two Mudaraba pools in Dollars and Rupees. The agent banks shall make an initial investment aggregating USD 20 million and Rs. 5,000 million in respective pools by subscribing to special INPCs reserved for agent banks.
The fund by INPCCL in each pool shall be used for extending Shariah-compliant financing to the federal government. The agent bank’s investment will be of transitory nature, liable to be retired or withdrawn on receipt of investments from the individual investor(s).
Similarly, the agent banks shall be responsible to make available liquidity to the Mudaraba pools in the event of redemption or premature withdrawal of funds by investors, by re-subscribing the special INPCs reserved for agent banks.
INPCCL shall be managed under the mandate of its Board of Directors (BoDs). It shall enter in to Agency Agreement with Agents Bank for sale of INPCs to their clients maintaining Roshan Digital Accounts with them. INPCCL shall also communicate the expected rates, Profit Sharing Ratio (PSR) and weightages applicable to different tenors and categories of INPCs and Agent Banks’ investment in the USD and PKR pools to be maintained by INPCCL for the issuance of INPCs.
Agent banks shall also disclose on their web-page the PSR and weightages for each tenor of INPCs at the beginning of each month. INPCs will be offered by eight banks including Habib Bank, Bank Alfalah, Standard Chartered Bank, Samba Bank, Faysal Bank, MCB Bank, United Bank Limited, and Meezan Bank.
Procedure For Investment in INPCs:
- The INPCCL shall issue the INPCs in a scrip-less format, which 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 funds for investment in INPCs must be remitted from abroad in the investor’s FCVA or NRVA after 30th day of June, 2020.
- The investors shall have the option to subscribe PKR denominated or/and US Dollar denominated INPCs of 3-Month, 6-Month, 12-Month, 3-Year and 5-Year tenors.
- In case of purchase of US Dollar denominated INPCs, agent banks have two options to remit the purchase value of INPCs 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.
- SBP shall, on the request of INPCCL, afford credit in the USD Clearing account or PKR current account of the commercial bank the net encashment proceeds on T+2 working day basis, where T is the date of submission of request to SBP by agent bank.
Periodic Profit Payments:
- INPCCL shall make periodic profit payments on six (6) monthly basis only in respect of INPCs of 3- year and 5-year maturities in their respective currencies.
- The six (6) months for the periodic profit payment shall be determined from the date of issuance of the INPCs. For example: if INPCs are issued on 20th October 2020, the profit payments shall be made on 20th April 2021 and by subsequent six-monthly dates accordingly. As INPCCL will compute the Profit/Loss of each pool on monthly basis, the profit for the broken days shall be computed based on the latest completed month’s profit/loss. For instance, in the above example the profit for the last 20 days of April 2021 shall be computed based on the profit/loss of March 2021.
- INPCCL shall make the periodic profit payments on INPCs (net of deduction of tax as specified in Rule 18 of the NPC Rules, 2020) on their respective due dates by advising SBP-BSC Karachi to credit 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.
Appointment of Agent Banks:
- In pursuance of the Agency Agreement for Sale of Islamic Naya Pakistan Certificates between INPCCL and agent banks, the banks shall act as INPCCL’s agent for:
- The digital execution of the Mudaraba Agreement,
- Receipt of investment amount from the investors and subsequent transfer to the INPCCL;
- Timely dissemination of data over agreed medium pertaining to the Mudaraba Agreement including, but not limited to weightages, profit sharing ratios etc.;
- Timely remittance of Mudaraba profit to the investors as and when received from the INPCCL; and
- Timely remittance of redemption amount (if any) along with relevant profit amount to the investor as and when received from the INPCCL.