KARACHI: The rate of profit on premium prize bonds having denominations of Rs25,000 and Rs40,000 has increased to 1.86 per cent from the existing 1.79 per cent, according to the Finance Division on Wednesday.

The State Bank of Pakistan (SBP) has also issued a circular to inform the change of rate to all the presidents and chief executive officers of commercial banks.

The central bank said the new profit rate will be implemented from September 10, 2021. “The new rates shall be applicable on the bi-annual profit amount due for payment after March 9, 2022,” it added.

The government launched premium prize bonds in April 2017 to document the money investment in the bills. Initially, the Central Directorate of National Savings (CDNS) launched premium prize bonds with the denominations of Rs40,000 and later it launched bonds with the denominations of Rs25,000.

The government plans to document all the denomination prize bonds and, in this regard, bearer bonds of high denominations had been stopped from circulation.

The premium prize bonds have significance, as the government offers return on investment, as well as prize money through quarterly draws.

Since the launch of the premium prize bonds in April 2017, the investment in the Rs40,000 denomination bill rose to Rs33.7 billion by October 2021.

The premium prize bonds of Rs25,000 denomination were introduced in June 2021 and since then such bills attracted Rs20.82 billion investment.

The total investment in premium prize bonds increased to Rs54.48 billion by October 2021, compared with Rs20.54 billion in the same month of the last year, recording a growth of 165 per cent.

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