KARACHI: An amount of Rs243 billion has been documented by people through surrendering bearer prize bonds of Rs40,000 denomination.
According to official statistics, the investment in unregistered prize bonds of Rs40,000 denomination fell to Rs14.55 billion by December 2019 as compared with Rs258 billion in May 2019.
The government on June 24, 2019 announced to discontinue the circulation of Rs40,000 denomination national prize bonds.
In compliance to the government announcement the State Bank of Pakistan (SBP) also issued instructions to banks. The central bank issued procedure for the banks to facilitate general public in exchanging the unregistered prize bonds with three different modes.
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 asked the banks that such prize bonds would not be sold after June 24, 2019 and will not be encashed/redeemed after March 31, 2020. No further draws of Rs40,000 denomination national prize bonds shall be held.
Due to replacement of the bearer prize bonds of Rs40,000 denomination the total investment in prize bonds fell to Rs718.38 billion by December 2019 as compared with Rs951.64 billion in May 2019.
The bearer papers 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.
Till May 2019 the total investment in premium prize bonds was Rs6.17 billion. But after the restriction imposed on bearer bonds the investment into registered prize bonds increased to Rs17.71 billion by end-December 2019.
According to the SBP the bearer instrument can be exchanged in savings schemes such as Special Saving Certificates (SSC) or Defence Saving Certificates (DSC). While third mode of exchanging the bearer bonds was direct transfer to bank accounts.
The government is intended to transform all the bearer prize bonds into to registered scrips. In this regard the Central Directorate of National Savings in collaboration with SBP is planning to issue scripless registered prize bonds amongst all denominations with objective to document the economy.