Home » Investing » How to invest in Treasury Bills in Pakistan?
Drowning in credit debt?

How to invest in Treasury Bills in Pakistan?

T-billsWhen it comes the turn of portfolio arrangement in risk free investment, treasury bills are evergreen alternative to diversify your portfolio assuming no risk. These are a kind of government’s securities which are issued by the State Bank of Pakistan. For a layman, T-Bill is a sort of myth. But let’s get it simplified. The biggest misconception among people is about its buying procedure. It cannot directly be bought from the State Bank of Pakistan by the general public. Instead, State Bank itself nominates Primary Dealers (PDs) across the country. The primary dealers are usually the large commercial banks which are nominated after winning the bid.

Investment Process

A lay man can open an account with primary dealer known as Investor’s Portfolio Security (IPS) Account. Through this account, general public can invest in T-Bills. Primary dealers operate on behalf of the State Bank of Pakistan and thus of the Government of Pakistan. The investment opportunity is provided on multiples of PKR 5000. For instance, the minimum amount required is Rs. 5000 which is deposited to the nominated primary dealer, for example, JS Bank or United Bank Limited.


Treasury bills are sold at realized value and called back on the Face Value (Realized Value is always less than the face value). The spread (difference) between face value and realized value is nominated as the investor’s gain. This is not about fixed rate of interest but it works as a zero coupon instrument (usually the bonds). Yet, no fixed rate of interest is offered but the fixed amount of investor’s gain is predetermined which is offered at the time of T-Bill retirement (also known as T-Bill maturity). The spread of primary dealer is also specified by the State Bank of Pakistan.

Maturity Time

The usual maturity time period is 03 months, 06 months, and 12 months. The highest spread is offered on 12 months’ Treasury bill. It is quite sure that is a debt instrument as government’s borrowing. Thus it is based on good faith and entirely risk free. Government retires the older T-Bills and issues newer each year. Without retiring or calling back the older ones, Government is not supposed to issue newer. However, in the severe situations of economic, political, or any other natural disaster, government may take some extension in maturity time period. But for the well being of an economy, it is never considered as a supportive point.

Who Can Invest?

Every person possessing a valid National Identity Card with substantial amount in hand is authorized to open an IPS account with any Primary Dealer across the country. Denying to anyone having the prescribed authority is a crime and hence petition in the local court may be submitted in case of refusal by any PD. Foreign investors can also invest in t-bills by opening a special sort of account known as Special Convertible Rupee Account. Foreigners may invest after getting their currency in to Pakistani Rupee. At the time of maturity, their gains are sent to their home country after converting back to their local currencies.

Applicable Deductions

There is no scheduled deduction on such account such as Zakat, Income Tax, Capital Gain Tax etc.


Following is a couple of benefits associated with investment in T-Bills in Pakistan

  • There is higher liquidity of t-bills in secondary market if an investor wants to sell it before maturity term.
  • There is no risk associated with the purchase and payment.
  • Banks accept the IPS account as collateral for guaranteeing purposes.
  • The process of investment is really easy and out of fuss.
  • The maturity term is short. Hence, there is no need to wait for long time periods to earn returns.
  • As compared to the time period, the returns are really high.

List of PDs

A total of 11 commercial banks and Financial Intermediaries have been nominated as the primary dealers as follows:

  • JS Bank Limited
  • Habib Bank Limited
  • Faysal Bank Limted
  • NIB Bank Limited
  • Bank Alfalah Limited
  • Pak Oman Investment Co.
  • United Bank Limited
  • Citi Bank NA
  • Muslim Commercial Bank Limited
  • Standard Chartered Bank (Pakistan) Limited



About Emaad Qureshi