Pkrevenue.com

Tag: Prize Bonds

  • History of Prize Bonds in Pakistan

    History of Prize Bonds in Pakistan

    KARACHI: State Bank of Pakistan (SBP) has made Rs5 denomination prize bond as part of its museum.

    Prize Bond, as the name suggests, are Bonds issued by a Government, which do not promise any interest, but award a prize, determined by a draw held at fixed date or regular intervals. Prize Bonds are investment and are bearer type of security available in different denominations.

    The First Prize Bonds in the sub-continent were issued on sale in denominations of Rs. 10 and Rs. 100, by the undivided Indian Government on 15th January, 1944 and could be cashed on any date after 15th January, 1949. These were called “Five Year interest-free Bonds 1949”.

    After the partition of sub-continent, Pakistan first issued the interest-free “National Prize Bonds” of Rs. 10 in October 1960, managed by the ‘Central Directorate of National Savings’ (CDNS). The Prize Bonds were launched by the then Minister, Gen. K.M. Shaikh, and the first Bond was also purchased by him. Later Rs. 5, 11, 50, 100, 500, 1000, 5000, 10000 & 25000 denomination Prize Bonds were issued.

    The draw of each Prize Bond was held every three months, with the first draw held in January 1961. The traditional drum was used initially for the draw, but imported machines similar to slot machines were later used. The draws were supervised by draw committees, with the chairman being a senior Government officer, and members from the State Bank of Pakistan and Central Directoarte of National Savings (CDNS).

    Rs. 200, 750, 1500, 7500, 15000, 25000 & 40000 denomination Bonds are currently in circulation.

    Date extended for exchanging bearer prize bonds
  • Date extended for exchanging bearer prize bonds

    Date extended for exchanging bearer prize bonds

    The finance division has notified extension in date for exchanging / conversion of bearer prize bonds from September 30, 2021 to December 31, 2021.

    The date has been extended for unregistered (bearer) prize bonds in denomination of Rs40,000/-, Rs25,000/- and Rs15,000.

    In order to comply with the Financial Action Task Force (FATF) for the prevention of money laundering and terror financing, the government had decided to document the financial instruments by the withdrawal of bearer prize bonds.

    So far the government has decided to withdraw prize bonds of four denominations including Rs40,000/-, Rs25,000/-, Rs15,000 and Rs7,500. However, the last date for exchanging Rs7,500 denomination bearer prize bonds is December 31, 2021.

    The government started withdrawal of bearer prize bonds with Rs40,000 denomination on June 24, 2019. Later, 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.

    It is likely the finance ministry extend the date for encashment / exchanging the bearer prize bonds beyond September 30, 2021. However, the decision in this regard has not been taken so far.

    The finance ministry has issued the following procedure for encashment/exchanging the bearer prize bonds.

    01. Conversion to Premium Prize Bonds (Registered): 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 State Bank of Pakistan (SBP)’s 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.

    02. Replacement with Special Saving Certificates (SSC) / Defence Saving Certificates (DSC): 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.

    03. Encashment at Face Value: 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 and to the Saving Accounts at National Saving Centers.

    Prize bonds (bearer) to become worthless after Sept 30
  • Prize bonds (bearer) to become worthless after Sept 30

    Prize bonds (bearer) to become worthless after Sept 30

    Bearer prize bonds of major denominations including Rs40,000/-, Rs25,000/- and Rs15,000/- will become worthless after September 30, 2021 if no date extension announcement comes from the government.

    The last date for encashment or exchanging the bearer prize bonds with denominations of Rs40,000/-, Rs25,000/- and Rs15,000 is September 30, 2021, which was already extended from May 31, 2021.

    In order to comply with the Financial Action Task Force (FATF) for the prevention of money laundering and terror financing, the government had decided to document the financial instruments by the withdrawal of bearer prize bonds.

    So far the government has decided to withdraw prize bonds of four denominations including Rs40,000/-, Rs25,000/-, Rs15,000 and Rs7,500. However, the last date for exchanging Rs7,500 denomination bearer prize bonds is December 31, 2021.

    The government started withdrawal of bearer prize bonds with Rs40,000 denomination on June 24, 2019. Later, 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.

    It is likely the finance ministry extend the date for encashment / exchanging the bearer prize bonds beyond September 30, 2021. However, the decision in this regard has not been taken so far.

    The finance ministry has issued the following procedure for encashment/exchanging the bearer prize bonds.

    01. Conversion to Premium Prize Bonds (Registered): 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 State Bank of Pakistan (SBP)’s 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.

    02. Replacement with Special Saving Certificates (SSC) / Defence Saving Certificates (DSC): 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.

    03. Encashment at Face Value: 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 and to the Saving Accounts at National Saving Centers.

    Prize Bonds (Bearer) not to be encashed after Sept 30
  • Prize Bonds (Bearer) not to be encashed after Sept 30

    Prize Bonds (Bearer) not to be encashed after Sept 30

    KARACHI: The last date to exchange or encash the unregistered of bearer prize bonds with denominations of Rs40,000, Rs25,000, and Rs15,000 is September 30, 2021.

    According to a circular issued by the State Bank of Pakistan (SBP), the Finance Division, Government of Pakistan has allowed to exchange/replace or convert Rs40,000, Rs25,000, and Rs15,000 denomination prize bonds (bearer) up to September 30, 2021.

    The SBP directed the banks that branch/region wise consolidated data of cited denomination prize bonds held by them on the last date i.e. September 30, 2021, shall be shared latest by October 01, 2021.

    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 finance divisions also issued the procedure for the redemption/conversion of bonds.

    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 State Bank of Pakistan (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 well as the authorized commercial bank branches and to the Saving Accounts at National Savings Centers.

    Date extended for encashment of bearer prize bonds
  • Withholding income tax rates on prize bonds

    Withholding income tax rates on prize bonds

    Federal Board of Revenue (FBR) has issued updated rates of withholding income tax on winning of prize bonds during fiscal year 2021-2022.

    The withholding tax rates have been updated after incorporating changes made through Finance Act, 2021.

    WITHHOLDING TAX CARD 2021-2022

    The FBR collects withholding tax under Section 156 of the Income Tax Ordinance, 2001.

    The withholding tax shall be collected from every person making payment on account of winning of prize on prize bond, cross word, raffle, lottery and quiz from recipient of prize or winning at the time of the prize or winnings are actually paid.

    A tax rate of 15 per cent of the gross amount shall be collected on payments made for prize on prize bond and cross word. The rate shall be increased by 100 per cent if the person is not appearing on the Active Taxpayers List (ATL).

    A tax rate at 20 per cent of the gross amount shall be collected on payments on winning from a raffle, lottery, prize on winning a quiz, prize, offered by companies for promotion of sale crosswords puzzles.

    However, the tax rate shall be increased by 100 per cent i.e. 40 per cent if person is not appearing on the ATL.

    The tax rate shall be final against tax liability of the person.

    Tax rates on exports of goods, services for 2021-2022
  • Date extended for encashment of bearer prize bonds

    Date extended for encashment of bearer prize bonds

    ISLAMABAD: The finance division has extended last date for redemption of bearer prize bonds Rs40,000 and Rs25,000 denominations up to September 30, 2021.

    According to notifications issued by the Finance Division the last date for redemption of Rs40,000 denomination bearer prize bonds has been extended up to September 30, 2021. Similarly, the last date for encashment of Rs25,000 denomination bearer prize bonds has also been extended up to September 30, 2021.

    What is last date for redemption of Rs40,000 prize bonds
  • What is last date for redemption of Rs40,000 prize bonds

    What is last date for redemption of Rs40,000 prize bonds

    ISLAMABAD: Regulators are at odds over the last date for conversion/redemption of Rs40,000 denomination national prize bonds, which created distress amongst the prize bondholders.

    A public notice was issued by the Central Directorate of National Savings (CDNS) in February 2021, that the government had discontinued the sale of National Prize Bonds (Bearer) of Rs25,000 and Rs40,000. “The deadline for redemption/encashment of these bonds is May 31, 2021.

    On the other hand, the State Bank of Pakistan (SBP) through its CMD Circular No. 07 dated December 08, 2020, stated: “the finance division, the government of Pakistan has extended the last date for encashment/replacement / conversion of Rs40,000 denomination National Prize Bonds (Bearer) till December 30, 2021, vide their Notification No. F.16(3)GS-1/2014-1603 dated November 26, 2020.”

    The finance division issued notification for withdrawal of Rs25,000 denomination national prize bonds from circulation in December 2020.

    Another SBP CMD Circular No. 08 dated December 10, 2020, stated: “National Prize Bonds of Rs25,000 denomination shall not be sold with immediate effect and will not be encashed/redeemed after May 31, 2021.”

    The public notice issued by the National Savings warned the holders who have not encashed their bonds so far, to redeem/encash Rs25,000 and Rs40,000 prize bonds before the deadline of May 31, 2021, using the following options:

    — Replace with Rs25,000 & Rs40,000 Premium prize bonds (registered)

    — replace with special saving certificates (SSC) / Defence Saving Certificate (DSC)

    — Encashment through Bank Account

    “After the deadline no such bonds will be redeemed/encashed,” it said.

    Sale of Prize Bonds Rs7,500, Rs15,000 stopped forthwith
  • Sale of Prize Bonds Rs7,500, Rs15,000 stopped forthwith

    Sale of Prize Bonds Rs7,500, Rs15,000 stopped forthwith

    ISLAMABAD: The finance ministry on Thursday announced that national prize bonds of denominations Rs7,500 and Rs15,000 shall not be sold with immediate effect.

    In different notifications the finance division announced to withdraw the prize bonds of denominations Rs7,500 and Rs15,000 from circulation with immediate effect.

    According to the notifications:

    “… Prize bonds of Rs7,500 denominations shall not be sold with immediate effect and will not be encahsed / redeemed after December 31, 2020 … “

    “ … Prize bonds of Rs15,000 denomination shall not be sold with immediate effect and will not be encahsed / redeemed after June 30, 2021 … “

    The finance divisions also issued the procedure for redemption/conversion of bonds.

    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 State Bank of Pakistan (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 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 well as the authorized commercial bank branches and to the Saving Accounts at National Savings Centers.

    Investors redeem Rs115 billion against suspended Rs25,000 prize bonds
  • Investors redeem Rs115 billion against suspended Rs25,000 prize bonds

    Investors redeem Rs115 billion against suspended Rs25,000 prize bonds

    ISLAMABAD: Investors have redeemed/enchased to the tune of Rs115 billion against bearer prize bonds of Rs25,000 denomination which were suspended by the government in December 2020.

    According to state media on Tuesday, the Central Directorate of National Savings (CDNS) had paid encashment of Rs 115 billion by February 28 to the investors against the suspension of prize bonds of Rs 25,000.

    An official of the CDNS quoted as saying that around Rs 115 billion had been paid to the customers during last three months and remaining 45 billion out of total Rs 160 billion would also be paid by May 30, 2021.

    On December 10, the State Bank of Pakistan (SBP) issued following instructions to the president and CEOs of all commercial banks regarding option to replace / encash the bonds:

    i. The Bonds can be converted to Rs. 25,000/-denomination Premium Prize Bonds (Registered) through the 16 field offices of SBP Banking Services Corporation, and branches of six authorized commercial banks i.e. National Bank of Pakistan, Habib Bank Limited, United Bank Limited, MCB Bank Limited, Allied Bank Limited and Bank Alfalah Limited.

    ii. The authorized commercial banks shall also issue Rs. 25,000/-denomination Premium Prize Bonds (Registered)as per the prescribed procedure, with immediate effect. Stock of the same has already been delivered to authorized commercial banks.

    iii. The bondholder shall be required to submit a written request for conversion of bearer bonds to Rs. 25,000/-Premium Prize Bonds (Registered) on the prescribed application form.

    iv. The bondholder shall also be required to submit prescribed application forms for registration / purchase of Premium Prize Bonds as per the procedure in vogue.

    Replacement with Special Savings Certificate (SSC) / Defence Savings 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, at authorized commercial bank branches and to the Savings Accounts at National Savings Centres.

    ii. All commercial banks shall receive requests for encashment of bearer bonds on the prescribed application form.

    A copy of the application form (Annexure A), duly signed and stamped, shall be provided to the bondholder as an acknowledgement receipt.

    Moreover, the prize bonds encashed / replaced by the general public may be surrendered to the concerned SBP BSC office through the respective regional office of the commercial bank.

    The government has already canceled prize bonds of Rs 40,000 and CDNS repaid to the investors the encashment worth of Rs 258 billion in 2019-20.

  • Premium prize bonds of Rs25,000 denomination launched to discourage informal economy

    Premium prize bonds of Rs25,000 denomination launched to discourage informal economy

    ISLAMABAD: The government has launched registered prize bonds of Rs25,000 denomination to discourage the informal economy and comply with laws related to anti-money laundering and counter financing of terrorism.

    Further, the decision to document the bearer prize bonds to comply with the conditions of Financial Action Task Force (FATF).

    The decision is part of documenting all unregistered prize bond of all denominations. Prior to this the government in the year 2017 launched premium prize bonds of Rs40,000 denomination. The bearer bonds of Rs40,000 denomination can be withdrawn up to December 30, 2021.

    Through a notification the Finance Division approved the issuance of premium prize bonds (registered) of Rs25,000 denomination from December 09, 2020.

    At a same time the government also announced to discontinue bearer bonds of Rs25,000 denomination from December 09, 2020.

    The total investment in Rs25,000 denomination bearer prize bonds is around Rs164 billion by end of October 2020. The investment in the unregistered prize bonds has to be surrendered by May 31, 2021.

    Holders of the bearer prize bonds can be converted to premium prize bonds through SBP Banking Services, National Bank of Pakistan, Habib Bank Limited, United Bank Limited, MCB Bank Limited, Allied Bank Limited and Bank Alfalah Limited.

    Furthermore, the bearer prize bonds can also be replaced with Special Saving Certificates or Defence Saving Certificates through SBP Banking Service Corporation and authorized commercial banks and National Savings Centers.

    Furthermore, the bearer bonds can be encashed by transferring the proceeds to the bond holder’s bank account through SBP Banking Services Corporation and authorized commercial bank branches and the Saving Accounts at National Saving Centers.

    According to the Finance Division, the draw of premium prize bonds would be held on quarterly basis in which 707 prizes would be awarded. The first prize will be Rs30 million.

    The holder of premium prize bonds shall also get profit at 1.79 percent on biannual basis.