Investment in premium prize bonds surges 158%

KARACHI: The investment in premium prize bonds has registered an unprecedented growth of 158 per cent by the end of July 2021, as the deadline to exchange bearer prize bonds is fast approaching.

According to the statistics released by the State Bank of Pakistan (SBP) on Wednesday, the investment in premium (registered) prize bonds of Rs25,000 and Rs40,000 denominations surged to Rs49.24 billion by the end of July 2021, compared with Rs19.06 billion by the end of the corresponding period last year.

To comply with the conditions of the Financial Action Task Force (FATF) and to prevent money laundering and financing of terrorism, the government stopped the circulation of unregistered bonds with the denominations of Rs40,000, Rs25,000, Rs15,000 and Rs7,500. The last date to exchange/replace the unregistered bonds is September 30, 2021.

The investment in premium prize bonds of Rs40,000 denomination increased 64 per cent to Rs31.23 billion by July 2021, compared with Rs19.06 billion by the same month of the last year.

Similarly, investment in prize bonds of Rs25,000 denomination increased to Rs18 billion since December 10, 2020, when the government announced to stop the circulation of the bearer bonds of this denomination.

The government on June 24, 2019, announced to discontinue the circulation of Rs40,000 denomination national prize bonds.

Similarly, on December 10, 2020, the government announced to discontinue the circulation of Rs25,000 denomination prize bonds. In April 2021, the Finance Ministry announced that the national prize bonds of Rs7,500 and Rs15,000 denominations would not be sold.

The investors of bearer bonds of Rs40,000 denomination surrendered around Rs256 billion since June 24, 2019. The closing stock is Rs1.27 billion of this denomination by July 2021.

Similarly, Rs159 billion has been surrendered in bearer prize bonds with the denomination of Rs25,000. The closing stock is Rs4.42 billion by the end of July 2021. A huge amount in the denominations of prize bonds (bearer) of Rs15,000 and Rs7,500 has also been surrendered.

Earlier, the Finance Division issued the procedure for the redemption/conversion of bonds.

The bonds can be converted to premium prize bonds (registered) of Rs25,000 and Rs40,000 denomination (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., National Bank of Pakistan, Habib Bank Limited, United Bank Limited, MCB Bank Limited, Allied Bank Limited, and Bank Alfalah Limited.

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

The bonds will only be encashed by transferring the proceeds to the bonds holder’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 National Savings Centers.