KARACHI: The investment in registered prize bonds has surged over 140 per cent by December 31, 2021; following the drive of documentation initiated by the government.

According to the official data released by the Central Directorate of National Savings (CDNS), the investment in registered or premium prize bonds sharply increased to Rs54.92 billion by the end of December 2021, compared with Rs22.837 billion in the same period of the last year.

To comply with the conditions of the Financial Action Task Force (FATF), the government withdrew bearer prize bonds of high denominations to bring unrecorded money into the formal economy.

So far, the government has withdrawn bearer prize bonds with the denominations of Rs7,500, Rs15,000, Rs25,000 and Rs40,000. The last date to exchange these prize bonds is March 31, 2022, which was already extended several times.

These bearer bonds can be exchanged with different specified options, including premium prize bonds. At present, the government introduced premium prize bonds in two denominations, i.e., Rs25,000 and Rs40,000.

According to the data, the investment in Rs40,000 registered prize bonds increased to Rs33.62 billion by December 2021, compared with Rs21 billion a year ago. Similarly, the investment in registered prize bonds with the denomination of Rs25,000 increased to Rs21.29 billion by December 2021, compared with Rs1.79 billion a year ago.

On June 24, 2019, the government had announced to discontinue the circulation of Rs40,000 denomination national prize bonds. Similarly, on December 10, 2020, it discontinued the circulation of Rs25,000 denomination prize bonds, while in April 2021, the Finance Ministry announced that the national prize bonds of denominations Rs7,500 and Rs15,000 would not be sold.

The Finance Division issued the procedure for the redemption and conversion of bonds.

The bonds can be converted to premium prize bonds (registered) with the denomination of Rs25,000 and Rs40,000 (subject to the adjustment of differential amount) through 16 field offices of the State Bank of Pakistan (SBP) Banking Services Corporation, and the branches of six commercial banks, i.e., the National Bank of Pakistan, Habib Bank Limited, United Bank Limited, MCB Bank Limited, Allied Bank Limited and the Bank Alfalah Limited.

The bonds can be replaced with Special Saving Certificates and Defence Saving Certificates through the 16 field offices of the SBP Banking Services Corporation, authorised commercial banks and the National Savings Centre.

The bonds will only be encashed by transferring the proceeds to the bondholder’s bank account through the 16 field offices of the SBP Banking Services Corporation, as well as the authorised commercial bank branches and to the Saving Accounts at the National Savings Centres.

The government is aimed at documenting the entire investments made through CDNS. In this regard, the entire denomination of prize bonds and national saving certificates will be brought under the verified system, including identifying the source of income for investment in the national savings.