Yes its to release the oil pressure which builds up when your engine is running. Eventhough in your bike (like most bikes here) the pipe is just hanging out however I seen that in some 4 stroke units this pipe is feeded into the air inlet of the Carburetor. Basically when connected to the carb air inlet this pipe feeds oil fumes to the combustion chamber ensures better seal and performance.
The reason why its hanging out in your bike is because its an air cooled unit and the oil fumes are hot.......Pakistani weather wont allow us to feed it in the air inlet. Haan in liquid cooled engines these oil fumes are not wasted....check any car engine.
I hope you got the answer.....