Askari Bank Limited is offering Investor Portfolio Securities accounts (IPS) to its customers. IPS Accounts are custodial accounts maintained for buying and holding Government Securities (T-Bills, PIBs, Sukuks etc.) on behalf of their customers. SBP is also encouraging public sector to invest in Government Securities.

Eligibility Criteria

Any individual or entity, which has PKR denominated account with AKBL is eligible for availing IPS services. These accounts enable customers to maintain custody of their investing GOP securities with the AKBL and also facilitate the trading of these securities with easy transfer to other accounts after paying a specified fee.

IPS Account Opening Procedure

Customers interested in buying Government of Pakistan Securities, need to follow the steps stated below:

• The customer must be a PKR account holder of AKBL and if not, then the customer is required to open PKR account with AKBL as per the banks’ procedures.
• After confirmation of the normal Banking PKR Account in AKBL, the customer will be offered for IPS account opening in the branch.
• The customer will submit the duly filled IPS Account Opening Form along with other required documents and formalities.

Documents required for IPS Account (Corporate Clients)

• Trust Deed / Memorandum and Articles of Association or any other Registered Document
• Board resolution showing intent to open an “IPS” account
• List of Board of Directors
• CNIC copies of Board of Directors
• Copy of CEO’s / Board Approval for Authorized Signatories
• CNIC copies of Authorized Signatories
• Copy of Certificate of Incorporation / Commencement of Business
• NTN No

Documents required for IPS Account (Individuals)

• CNIC copy of Customer
• NTN No

Key Features

• Non-paper-based instruments
• Payments are guaranteed by Government of Pakistan

Eligible GOP Securities

Customer can invest in the following securities through AKBL within the parameter of IPS account services:

1-Treasury Bills (T-Bills)

Treasury bills are zero coupon instruments issued by the Government of Pakistan and sold through State Bank of Pakistan via fortnightly auctions. Salient features are;

• Issued in tenors of 3, 6 and 12 months
• Denomination: Issued in multiples of PKR 5,000
• Zakat: No compulsory deduction of Zakat at source
• Tradable in the secondary market
• It is a discount-based instrument
• Redemption of the face value upon maturity is guaranteed by the Government of Pakistan

2-Pakistan Investment Bonds (PIBs)

PIBs are long-term bonds issued by the Government of Pakistan and sold through State Bank of Pakistan via periodic auctions. Salient features are;

• Issued in tenors of 3, 5,10, 20 Years
• Denominated in multiples of PKR 100,000/-
• PIBs are coupon base securities and coupons due after every six months
• PIBs are issued with Fixed and Floating rate of coupons
• Zakat: No compulsory deduction of Zakat at source
• Tradable in the secondary market
• It may be issued on both discount or premium basis
• Redemption of the face value upon maturity and periodic coupon payments

3-Government of Pakistan Ijarah Sukuk

GOP Ijarah Sukuks are medium term Shari’ah compliant bonds issued by the Government of Pakistan and sold through State Bank of Pakistan via periodic auctions. Salient features are;

• Previously available in 3 years, currently being issued with 5 years of maturity. However, it is the discretion of Government of Pakistan to set the maturity period
• Denominated in multiples of PKR 100,000/-
• GOP Ijarah Sukuks are coupon base securities and coupons due after every six months
• GOP Ijarah Sukuks are issued with Floating rate of coupons
• Zakat: No compulsory deduction of Zakat at source
• GOP Ijarah Sukuks are based on the guidelines of Shariah and approved by SBP Shariah Board
• Tradable in the secondary market
• The face value redemption is upon maturity and coupon

How to participate in Investment

Investment through secondary market:

IPS account holders can purchase government securities from secondary market through Askari Bank Limited. Customer requests to the branch for the purchase of security(s), which includes the type of security, amount of security, tenor of security and rate.

Disinvestment through secondary market:

IPS account holders can sale government securities to secondary market through Askari Bank Limited. Customer requests to the branch for the sale of security (s), which includes the type of security, amount of security, tenor of security and rate.

Withholding Tax

• Investment in these government securities through IPS accounts are subject to the recovery of mandatory government taxes
• On maturity, State Bank of Pakistan will deduct Withholding Tax on profit / interest as per defined tax rates
• Deduction of Withholding Tax will be borne by the customer holding the security at the due time of coupon

Bank Charges

Service charges for IPS accounts are applicable as per prevailing Askari bank’s Schedule of Charges (SOC), for details and existing charges, please refer to our SOC available at www.askaribank.com

Disclaimer

AKBL is not acting as an investment manager, nor as an investment, legal or tax advisor to the Client / Customer for IPS accounts. AKBL’s role is solely to act as a custodian of IPS accounts. These contents are not an investment advice and does not constitute any offer or solicitation to offer or recommendation of any investment product. These are for general purposes only and does not take into account individual needs, investment objectives and specific financial circumstances.