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  • Profit Paid On Zero Coupon Naya Pakistan Certificates

    Posted by Mohammad Mudassar on October 12, 2023 at 5:08 am

    Salaam,

    Can you please explain the profit paid on Zero coupon bonds/certificates which are basically issued at a discount to their face value. The interest/profit earned by the person is the difference between the purchase value and the face value. Currently this is offered by government, Naya Pakatan certification as zero coupon bond upto 1 year.

    Will the return/profit Is this case come into Riba?

    Appreciate your kind response.

    Thanks

    Mohammad Mudassar.

    Umer replied 4 months, 3 weeks ago 2 Members · 1 Reply
  • 1 Reply
  • Profit Paid On Zero Coupon Naya Pakistan Certificates

    Umer updated 4 months, 3 weeks ago 2 Members · 1 Reply
  • Umer

    Moderator October 12, 2023 at 8:38 am

    Riba is only a concern in loan transactions. Generally government saving schemes are structured more like a loan and their profits are considered close to riba, hence Ghamidi Sahab recommends restraint from investing in such schemes unless circumstances are exceptional.

    Islamic Naya Pakistan Certificates (INPC) are structured as Investment/Financing (Mudarabah) as opposed to Naya Pakistan Certificates (NPC) which are structured more like a loan arrangement with a predetermined rate of return. There is no objection as far as INPC is concerned, NPC however seems objectionable. It is also important to mention that predetermined rate of return is not the reason for prohibition and neither does it fall under Riba. It is the overall structure of an arrangement which needs to be kept in mind i.e. whether a financing arrangement or a loan arrangement.

    For comments of Ghamidi Sahab which covers both modes of investments with a Government, please refer to the videos shared in the following thread:

    Discussion 1276

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    The information on NPC/INPC is gathered from the content available in the followign links:

    https://www.sbp.org.pk/NPC-/FAQs.html

    https://www.meezanbank.com/naya-pakistan-certificate/

    https://www.bankalfalah.com/naya-pakistan-certificates-for-roshan-digital-account-customers/

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