National prize bonds (bearer or unregistered) are expiring this month and the bills will become a useless piece of paper after December 31, 2021.
The government has set a deadline of December 31, 2021, to withdraw bearer bonds with denominations of Rs7,500, Rs15,000, Rs25,000, and Rs40,000.
The holders of these bonds have been asked to exchange or convert those bills before the cutoff date.
The State Bank of Pakistan (SBP) data showed that bearer bonds worth Rs28 billion were still in the possession of the investors by the end of October 2021.
However, the bondholders surrendered these bills worth Rs437.59 billion during the last one year. The stock of these bearer bonds is Rs465.59 billion by October 2020.
In June 2019, the government decided to discontinue high denomination bearer bonds in a phased manner. 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 national prize bonds of denominations Rs7,500 and Rs15,000 shall not be sold.
The bonds can be converted to premium prize bonds (registered) of denomination of Rs25,000 and Rs40,000 (subject to the adjustment of differential amount) through 16 field offices of SBP Banking Services Corporation, and 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 Special Saving Certificates/Defence Saving Certificates through the 16 field offices of SBP Banking Services Corporation, authorized 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 SBP Banking Services Corporation as well as the authorized commercial bank branches and to the Saving Accounts at National Savings Centers.
Following the announcement to discontinue the bearer bonds the investments in premium prize bonds recorded a phenomenal surge.
The investment in premium prize bonds increased to Rs54.5 billion by the end of October 2021 as compared with Rs20.54 billion in the same month of the last year, showing an increase of 169 per cent.