KARACHI: The investment in premium prize bonds of Rs40,000 denomination has increased sharply by 115 percent following the ban imposed by the government on bearer instrument of same denomination.
The investment in registered premium prize bonds has increased to Rs13.26 billion by July 2019 as compared with Rs6.17 billion by end of May 2019, according to data released by State Bank of Pakistan (SBP) this week.
The bearer instruments have been known as parking lot for undocumented economy. Therefore, the government launched registered prize bonds of Rs40,000 denomination in March 2017 which could be purchased against certain requirements including Computerized National Identity Card (CNIC) and valid bank account.
The government on June 24, 2019 announced to discontinue the circulation of Rs40,000 denomination national prize bonds.
According to official statistics made available to The News on Friday, the total investment in bearer prize bonds of Rs40,000 denomination fell to Rs81.38 billion by July-end 2019 as compared with Rs258 billion in May 2019.
The State Bank of Pakistan (SBP) has stopped banks from issuing prize bond denomination of Rs40,000 with immediate effect and also issued instructions regarding conversion into registered bonds and encashment.
The SBP on June 24 issued the following instructions regarding handling of Rs.40,000/- denomination National Prize Bonds are issued herewith for information, guidance and meticulous compliance:
a) National Prize Bonds of Rs.40,000/- denomination shall not be sold after June 24, 2019 and will not be encashed/redeemed after March 31, 2020.
b) No further draws of Rs.40,000/-denomination National Prize Bonds shall be held.
c) Cash payment for encashments of bonds is not allowed. However, the bond holder (s) shall have the following options to replace / encash these bonds:
1. Conversion of premium prize bonds (registered)
2. Replacement with special saving certificate (SSC)/Defence Saving Certificate (DSC)
3. Encashment at face value.
d) Appended below is the SOP for processing requests under the aforementioned options for compliance by all banks:
1. Conversion to Premium Prize Bonds (Registered)
i. The bonds can be converted to premium prize bonds (registered) through the 16 field offices of SBP Banking Services Corporation, and authorized branches of six commercial banks i.e. National Bank of Pakistan (NBP), Habib Bank Limited (HBL), United Bank Limited (UBL), MCB Bank Limited (MCB), Allied Bank Limited (ABL) and Bank Alflah Limited (BAFL).
ii. The bond holder shall be required to submit a written request for conversion of bearer bonds to premium prize bonds (registered) to be registered in his (her) name on the prescribed application.
iii. The bond holder shall also be required to submit prescribed applications forms for registrations / purchase of premium prize bond as per the procedure in vogue.
Replacement with the Special Saving Certificate (SSC)/Defence Saving Certificate (DSC)
i. The bonds can be replaced with SSC / DSC through the 16 field offices of SBP Banking Services Corporation, authorized commercial banks and National Savings Centers.
ii. All authorized commercial banks shall, therefore, accept requests for replacement of bearer bonds with SSC or DSC on the prescribed application form.
iii. The bondholder shall also be required to submit application form for purchase of SSC/DSC (SC-1) as per the prescribed procedure.
Encashment at Face Value:
i. The bonds will only be encashed by transferring the proceeds to the bond holder’s bank account through the 16 field offices of SBP Banking Services Corporation as well as the authorized commercial bank branches.
ii. All commercial banks shall receive requests for encashment of bearer bonds on the prescribed application form.
A cop of the application form, duly signed and stamped, shall be provided to the bondholder as an acknowledgement receipt.
The SBP said that it is needless to mention that the National Prize Bonds of Rs40,000 denomination tendered at the counters of banks shall be subject to through scrutiny to ascertain their genuineness. In this regard, details regarding the security features in Rs40,000 denomination National Prize Bonds are available online.
Moreover, the prize bonds encashed / replaced by general public may be surrendered to concerned SBP BSC office through respective regional office of the commercial banks. For the purpose, the regional office may intimate the SBP BSC office three days in advance so that necessary arrangements for receipt of the bonds can be made.
It is imperative to mention that a notice regarding the above / mentioned facilities must be displayed at prominent places within branch premises for awareness and information of general public.
The SBP said that the bearer prize bonds of Rs40,000 cannot be exchanged against cash. However, it can be redeemed against registered prize bonds or can be converted into national saving schemes or face value (direct transfer to the bank account of bond bolder).
The SBP informed the banks that such prize bonds would not be sold after June 24, 2019 and would also not be encashed/redeemed after March 31, 2020. No further draws of Rs40,000 denomination national prize bonds shall be held.
Due to the ban the investment in bearer bonds of Rs40,000 denomination fell to Rs81.379 billion by July 2019 from Rs258.8 billion by end of May 2019.
Related Stories
