Golden Investment Opportunity For Small Account Holders

Web Desk — The account holders of the microfinance banks can now invest in risk-free high yielding government securities.

This measure was taken by the State Bank of Pakistan (SBP) to provide greater investment opportunities to the public so as to diversify funds for this exclusive avenue.

Microfinance Banks (MFBs) have been permitted to offer Investor Portfolio of Securities (IPS) accounts to their customers as per the SBP circular.

Banking experts called it a major initiative to enable the government to raise more liquidity from markets since borrowing money from the central bank is restricted under IMF conditions.

Through the auction of T-bills and Pakistan Investment Bonds, the government has borrowed from scheduled banks and corporations, but raising large amounts of liquidity could hurt trade and industry lending.

Individuals and retail investors must open an IPS account to hold, sell, and purchase government securities. In the past, only individuals and entities with PKR denominated accounts with scheduled banks could open IPS accounts.

The newly introduced measures offer regular and branchless banking (BB) account holders of MFBs two options. Account-holders can open IPS accounts with their MFB to purchase and sell government securities using their funds. The second option allows account holders to open IPS accounts with any scheduled bank to invest in government securities.

According to the SBP, “Both options allow account holders of MFBs to use amounts available in their accounts or Branchless Banking-wallet for the investment.”

According to the SBP, the recently released Customers’ Digital Onboarding Framework will simplify and facilitate the process of opening an IPS account, in which banks and MFBs are able to share customers’ KYC (Know Your Customer) information with any SBP and SECP regulated entity, after obtaining the customers’ consent.

Furthermore, these measures would also facilitate the development of systems to facilitate end-to-end investments in government securities in a completely digital fashion.

The SBP is confident that the new measures will further promote a culture of saving since they provide a more convenient way to channel small investments in government securities.

List of Microfinance Banks (MFBs):

HBL Microfinance Bank Limited

NRSP Microfinance Bank Limited

Khushhali Microfinance Bank Limited

Telenor Microfinance Bank Limited

Pak Oman Microfinance Bank Limited

U Microfinance Bank Limited

Mobilink Microfinance Bank Limited

APNA Microfinance Bank Limited

Advans Pakistan Microfinance Bank Ltd

Sindh Microfinance Bank Limited

FINCA Microfinance Bank Limited