KARACHI: The investment in premium prize bonds has surged 132 per cent to over Rs44 billion during the fiscal year 2020/21, according to the official data released on Monday.

The investment in premium prize bonds with the denominations of Rs25,000 and Rs40,000 increased to Rs44.13 billion by the end of June 30, 2021, compared with Rs18.98 billion during the same month of the last fiscal year.

The sharp rise in the premium prize bonds can be attributed to the government initiative to document bearer prize bonds to comply with the conditions of the Financial Action Task Force (FATF).

The requirement of documenting the prize bonds and other bearer saving instruments has been made mandatory to stop money laundering and terror financing by using unregistered mode of financing.

The investment in the premium prize bonds of Rs40,000 denomination increased to Rs29 billion by June 2021, compared with Rs18.98 billion in the same period of the last year.

Similarly, the investment in the premium prize bonds of Rs25,000 denomination, which was introduced in December 2020, increased to Rs15.13 billion.

To comply with the FATF condition, the government in a first step stopped the issuance of Rs40,000 denomination prize bonds on June 24, 2019.

Later, through a notification on December 10, 2020, the circulation of Rs25,000 denomination national prize bonds was stopped from circulation.

Most recently, the government in April 2021 decided to stop the circulation of Rs7,500 and Rs15,000 bearer prize bonds. The people have been given the option to convert/exchange Rs15,000, Rs25,000 and Rs40,000 bearer prize bonds by September 30, 2021.

Meanwhile, the bearer prize bonds of Rs7,500 denomination can be exchanged by December 31, 2021.

The bonds can be converted to the premium prize bonds (registered) through the 16 field offices of the State Bank of Pakistan’s Banking Services Corporations or through the branches of designated commercial banks.

The bonds can also be converted to special savings certificates or defence savings certificates through the SBP’s field offices, authorised commercial banks or the National Savings Centres.

The bonds can be encashed through transferring the proceeds to the holder’s bank account through the SBP’s field offices, authorised commercial banks or the National Savings Centres.