Karachi, January 25, 2025 – Investment in registered prize bonds has seen a remarkable surge, reaching Rs 58.65 billion by November 2024, according to the latest data released by the State Bank of Pakistan (SBP).
This represents a 9.22% increase compared to Rs 53.70 billion at the end of November 2023.
The sharp growth in registered prize bonds is attributed to two key factors: the phasing out of bearer prize bonds by the government and a significant reduction in interest rates on bank deposits following the SBP’s monetary easing policies. The government has withdrawn bearer prize bonds of denominations Rs 40,000, Rs 25,000, Rs 15,000, and Rs 7,500 from circulation. As a result, a substantial amount of investment has been redirected into premium or registered prize bonds.
The SBP has played a crucial role in driving this trend through its recent monetary policy adjustments. The central bank has lowered the benchmark policy rate from 22% to 13%, significantly reducing returns on traditional bank deposits. This has prompted investors to seek alternative, secure investment avenues such as registered prize bonds, which offer attractive returns and additional benefits.
Breaking down the investment figures, the Rs 40,000-denomination registered prize bonds saw a growth of 8.88%, with total investment rising to Rs 35.18 billion by November 2024, compared to Rs 32.31 billion a year earlier. Similarly, the Rs 25,000-denomination registered prize bonds experienced a 9.77% surge, with investments increasing from Rs 21.39 billion in November 2023 to Rs 23.48 billion by November 2024.
Market analysts believe the shift from bearer to registered prize bonds has improved transparency in Pakistan’s financial system. Registered prize bonds are linked to the investor’s identity, reducing the risk of misuse for illicit purposes. Additionally, they offer a secure alternative for individuals looking to diversify their portfolios amid economic uncertainties.
With declining interest rates and the government’s emphasis on financial transparency, the trend of increasing investment in registered prize bonds is expected to continue. This marks a significant shift in investor behavior and reflects growing confidence in regulated financial instruments.