New reporting and settlement mechanism aims to improve transparency and ensure timely processing of Premium Prize Bonds transactions.
The State Bank of Pakistan (SBP) has introduced a revised reporting mechanism for Premium Prize Bonds (PPBs), making it mandatory for all commercial banks to report and settle every sale transaction on the same day with the SBP Banking Services Corporation (SBP BSC).
The new directive is aimed at strengthening oversight, improving operational efficiency, and ensuring greater transparency in the management of registered Premium Prize Bonds.
According to a circular issued by the SBP’s Currency Management Department on Thursday, banks must now complete the settlement of all PPB sale transactions with SBP BSC on the day they are processed.
The central bank stated that the revised mechanism follows a review of the existing reporting system for Premium Prize Bonds issued through commercial banks.
Under the updated procedure, banks are required to report all PPB sale transactions through the designated DAP platform within the prescribed timelines.
Based on the daily transaction reports submitted by each bank, the SBP BSC Karachi office will automatically debit the corresponding amount from the bank’s account on the same day.
The circular further clarified that SBP BSC Karachi will also be responsible for calculating and recovering any charges related to delays in settlement.
If a commercial bank fails to settle the proceeds of Premium Prize Bond sales on the same day, it will be required to pay compensation for the delayed use of funds. The amount will be calculated using the SBP Overnight Reverse Repo (Ceiling) rate applicable for each day of the delay.
The central bank has also tightened accountability for reporting errors. It stated that commercial banks will be held liable for the full amount in cases where profit or prize money is mistakenly paid due to non-reporting, delayed reporting, or inaccurate reporting of sale, encashment, or transfer transactions. However, any applicable income tax adjustments may be considered where possible.
The revised reporting framework is expected to streamline the issuance and settlement process of Premium Prize Bonds while minimizing operational risks arising from delayed or inaccurate reporting.
By introducing daily settlement requirements and financial penalties for non-compliance, the SBP aims to enhance discipline among commercial banks and strengthen the integrity of the Premium Prize Bonds system across Pakistan.