Tag: Prize Bonds

Unregistered prize bonds worth Rs206 billion surrendered on discontinuation announcement

KARACHI: An amount of around Rs206 billion has been surrendered following the government announcement of discontinuation the circulation of unregistered prize bonds of Rs40,000 denomination.

According to information received to PkRevenue.com, the total investment in unregistered Rs40,000 denomination prize bonds fell to Rs52.46 billion by August-end 2019 as compared with Rs258 billion in May 2019.

The government on June 24, 2019 announced to discontinue the circulation of Rs40,000 denomination bearer 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 would be held.

The SBP issued the following instructions regarding handling of Rs.40,000/- denomination National Prize Bonds are issued herewith for information, guidance and meticulous compliance:

a) National Prize Bonds of Rs.40,000/- denomination shall not be sold after June 24, 2019 and will not be encashed/redeemed after March 31, 2020.

b) No further draws of Rs.40,000/-denomination National Prize Bonds shall be held.

c) Cash payment for encashments of bonds is not allowed. However, the bond holder (s) shall have the following options to replace / encash these bonds:

1. Conversion of premium prize bonds (registered)

2. Replacement with special saving certificate (SSC)/Defence Saving Certificate (DSC)

3. Encashment at face value.

d) Appended below is the SOP for processing requests under the aforementioned options for compliance by all banks:

1. Conversion to Premium Prize Bonds (Registered)

i. The bonds can be converted to premium prize bonds (registered) through the 16 field offices of SBP Banking Services Corporation, and authorized branches of six commercial banks i.e. National Bank of Pakistan (NBP), Habib Bank Limited (HBL), United Bank Limited (UBL), MCB Bank Limited (MCB), Allied Bank Limited (ABL) and Bank Alflah Limited (BAFL).

ii. The bond holder shall be required to submit a written request for conversion of bearer bonds to premium prize bonds (registered) to be registered in his (her) name on the prescribed application.

iii. The bond holder shall also be required to submit prescribed applications forms for registrations / purchase of premium prize bond as per the procedure in vogue.

Replacement with the Special Saving Certificate (SSC)/Defence Saving 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 as well as the authorized commercial bank branches.

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

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

The SBP said that it is needless to mention that the National Prize Bonds of Rs40,000 denomination tendered at the counters of banks shall be subject to through scrutiny to ascertain their genuineness. In this regard, details regarding the security features in Rs40,000 denomination National Prize Bonds are available online.

Moreover, the prize bonds encashed / replaced by general public may be surrendered to concerned SBP BSC office through respective regional office of the commercial banks. For the purpose, the regional office may intimate the SBP BSC office three days in advance so that necessary arrangements for receipt of the bonds can be made.

It is imperative to mention that a notice regarding the above / mentioned facilities must be displayed at prominent places within branch premises for awareness and information of general public.

October 8, 2019
Investment in premium prize bonds grows by 115 percent after ban on bearer instruments

KARACHI: The investment in premium prize bonds of Rs40,000 denomination has increased sharply by 115 percent following the ban imposed by the government on bearer instrument of same denomination.
(more…)

September 7, 2019
Investment into premium prize bonds post 46pc growth

KARACHI: The investment in premium prize bonds of Rs40,000 denomination has increased by over 46 percent as the government stopped the circulation of bearer bonds of same denomination and launched campaign to document the economy.

According to statistics released by State Bank of Pakistan (SBP) the total investment into premium prize bonds of Rs40,000 denomination increased to Rs7.665 billion by end of June 2019 as compared with Rs5.245 billion in same month of the last year.

The premium prize bonds were launched by the government in March 2019 with the aim to bring undocumented money into the mainstream economy.

According to salient features of the premium bonds issued by Central Directorate of National Savings (CDNS):

— The bond is available in Rs40,000 denomination

— Registered in the name of investor.

— Quarterly prize money draws as well as bi-annual profit payment.

— For individuals, public and private sector institutions except banks, insurance companies and mutual funds.

— Direct credit and prize money and profit in investors bank account.

— No Application Forms required for claiming prize money & profit.

— Unlimited Investment and Tenure.

— WHT applicable and Exempt from Zakat.

— Transferable and Pledge-able.

— Can be purchased through Cash, Cheque, Pay-Order and Bank Draft

— Can be purchased from offices of State Bank of Pakistan Banking Services Corporations.

The growth in premium prize bonds investment is much faster in the month of June 2019 as compared with the previous month due to the government announcement to stop the circulation of bearer bonds of Rs40,000 denomination.

The investment in Rs40,000 prize bonds denomination grew by 24 percent to Rs7.665 billion in June 2019 as compared with Rs6.17 billion in May 2019.

The government on June 24, 2019 notified withdrawal of Rs40,000 denomination national prize bonds from circulation.

On the same date the State Bank of Pakistan (SBP) issued instructions to chief executives and banks of all banks for compliance.

The SBP instructed:

(a) National Prize Bonds of Rs40,000 denomination shall not be sold after June 24, 2019 and will not be encashed/redeemed after March 31, 2020.

(b) No further draws of Rs40,000 denomination national prize bonds shall be held.

(c) Cash payment for encashment of bonds is ‘Not’ allowed. However, the bond holder(s) shall have the following options to replace/encash the bonds:

1. Conversion of Premium Prize Bonds (Registered)

2. Replacement with Special Saving Certificate (SSC)/Defence Savings Certificate (DSC)

3. Encashment at Face Value.

The SBP also issued Standard Operating Procedure (SOP) for conversion to premium prize bonds (registered).

i. The bonds can be converted to premium prize bonds (registered) through the 16 field offices of SBP Banking Services Corporation, and authorized 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.

ii. The bond holder shall be required to submit a written request for conversion of bearer bonds to premium prize bonds (registered) to be registered in his/her name on the prescribed application form.

iii. The bond holder shall also be required to submit prescribed application form for registration/purchase of premium prize bonds as per the procedure in vogue.

The SBP also issued procedure for replacement with Special Saving 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 Saving 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 bond holder shall also be required to submit application form for purchase of SSC/DSC as per the prescribed procedure.

The SBP issued procedure for encashment at face value and said that 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.

The SBP further said that all commercial banks shall receive request for encashment of bearer bonds on the prescribed application form.

The SBP said that the prize bonds encashed/replaced by general public may be surrendered to concerned SBP BSC office through respective regional office of the commercial bank. For the purpose, the regional office may intimate the SBP BSC office three days in advance so that necessary arrangements for receipt of the bonds can be made.

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Investment in saving certificates rises by 19 percent to Rs2,217 billion

August 13, 2019
FBR issues withholding tax rates for winning prize bonds

KARACHI: Federal Board of Revenue (FBR) has issued withholding tax rates for winning prize bonds, cross word, raffle, lottery and quiz for tax year 2019/2020 as effective from July 01, 2019.

The FBR said that every person making payment shall collect withholding tax from persons on active taxpayers list (ATL) and double the amount of the tax from persons not appearing on the ATL at the time the prize or winning were actually paid.

The collection of withholding tax under Section 156 of Income Tax Ordinance, 2001 shall be final.

The withholding tax shall be collected at the following rates:

(I) Payments made for prize on quiz bond and cross word the tax rate shall be 15 percent of the gross amount.

Persons not appearing in the Active Taxpayers’ List: The applicable tax rate is to be increased by 100 percent (Rule-1 of Tenth Schedule to the Ordinance), i.e. 30 percent of the gross amount.

(II) Payments on winning from a raffle, lottery, prize on winning a quiz, prize, offered by companies for promotion of sale crossword puzzles the tax rate shall be 20 percent of the gross amount.

Persons not appearing in the Active Taxpayers’ List: The applicable tax rate is to be increased by 100 percent (Rule-1 of Tenth Schedule to the Ordinance), i.e. 40 percent of the gross amount.

July 23, 2019
Prize bonds, bearer instruments to be registered

KARACHI: Pakistani authorities have assured International Monetary Fund (IMF) of registering prize bonds and other bearer instruments to eliminate the use of these instruments in potential illegal activities and tax avoidance.

The IMF issued Pakistan country report on Monday following successful $6 billion loan program.

In order to make the program successful the Pakistani authorities had assured the fund of strengthening governance and the control of corruption.

The priorities include:

Strengthening the effectiveness of anticorruption institutions. A national committee has been established to implement the recommendations from the UNCAC 2017 report.

A task force will review the institutional framework of the anticorruption institutions to enhance their independence and effectiveness in investigating and prosecuting corruption cases.

A study will be conducted on establishing a dedicated AML unit in the Federal Investigation Agency (FIA). Upgrading the financial investigation capacities of law enforcement agencies will be also prioritized.

Moreover, the authorities are pursuing agreements on information exchange with foreign countries to complement efforts to recover unlawful assets.

An Asset Recovery Unit in the Prime Minister’s Office is cooperating with the FBR’s International Taxation Unit in identifying assets abroad owned by Pakistani residents, in line with the OECD Convention on Mutual Administrative Assistance on Tax Matters.

Advancing anti-corruption efforts through the enhanced used of AML tools, including by (i) ensuring that banks and other reporting institutions improve their capacities to identify politically exposed persons and apply enhanced due diligence measures and (ii) providing adequate resources to the Financial Monitoring Unit to improve the dissemination of financial intelligence that can be used to support corruption investigations.

Moreover, asset declarations of high-level public officials will be comprehensive in scope (i.e., assets beneficial owned or located abroad), filed with a central federal agency, electronically searchable, and appropriately verified.

“Registering prize bonds and other bearer instruments to eliminate their use in potential illegal activities/tax avoidance,” the report said.

July 9, 2019
Rs260 billion to be documented through withdrawal of Rs40,000 bearer bonds in first phase

KARACHI: The government will document an amount of Rs260 billion in first phase by withdrawing Rs40,000 denomination bonds.

The government has announced to stop circulation of high denomination bearer bonds in order to curb the black economy.

Till February 2019 the central directorate of national savings issued Rs259.22 billion bonds of Rs40,000.

On Jane 24, 2019 State Bank of Pakistan (SBP) issued instructions to commercial banks for not selling Rs40,000 Prize Bonds. The SBP also issued procedure for exchanging the bonds with premium bonds or documented saving certificates by March 2020.

According to Economic Survey of Pakistan 2018-2019 the CDNS had planned to convert all bearer bonds into documented securities.

A staggering amount of Rs939 billion has been invested in bearer bonds up to February 2019.

Market sources said the holders of bearer bonds worth Rs40,000 were desperate to exchange and were even offering to exchange much lower rates in order to avoid questioning.

The sources further said that many of those holders were desperate to exchange with US dollar and other foreign currencies, which put pressure on the local currency.

The rupee hit all time low at Rs165 to a dollar in Interbank Foreign Exchange Market on Wednesday.

On the other hand the FBR is also planning to question the persons exchanging the bearer bonds regarding source of investment.

June 26, 2019
SBP stops banks selling Rs40,000 prize bonds, issues procedure for conversion into registered bonds

KARACHI: State Bank of Pakistan (SBP) has stopped banks from issuing prize bond denomination of Rs40,000 with immediate effect and also issued instructions regarding conversion into registered bonds and encashment.

The SBP on Monday issued the following instructions regarding handling of Rs.40,000/- denomination National Prize Bonds are issued herewith for information, guidance and meticulous compliance:

a) National Prize Bonds of Rs.40,000/- denomination shall not be sold after June 24, 2019 and will not be encashed/redeemed after March 31, 2020.

b) No further draws of Rs.40,000/-denomination National Prize Bonds shall be held.

c) Cash payment for encashments of bonds is not allowed. However, the bond holder (s) shall have the following options to replace / encash these bonds:

1. Conversion of premium prize bonds (registered)

2. Replacement with special saving certificate (SSC)/Defence Saving Certificate (DSC)

3. Encashment at face value.

d) Appended below is the SOP for processing requests under the aforementioned options for compliance by all banks:

1. Conversion to Premium Prize Bonds (Registered)

i. The bonds can be converted to premium prize bonds (registered) through the 16 field offices of SBP Banking Services Corporation, and authorized branches of six commercial banks i.e. National Bank of Pakistan (NBP), Habib Bank Limited (HBL), United Bank Limited (UBL), MCB Bank Limited (MCB), Allied Bank Limited (ABL) and Bank Alflah Limited (BAFL).

ii. The bond holder shall be required to submit a written request for conversion of bearer bonds to premium prize bonds (registered) to be registered in his (her) name on the prescribed application.

iii. The bond holder shall also be required to submit prescribed applications forms for registrations / purchase of premium prize bond as per the procedure in vogue.

Replacement with the Special Saving Certificate (SSC)/Defence Saving 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 as well as the authorized commercial bank branches.

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

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

The SBP said that it is needless to mention that the National Prize Bonds of Rs40,000 denomination tendered at the counters of banks shall be subject to through scrutiny to ascertain their genuineness. In this regard, details regarding the security features in Rs40,000 denomination National Prize Bonds are available online.

Moreover, the prize bonds encashed / replaced by general public may be surrendered to concerned SBP BSC office through respective regional office of the commercial banks. For the purpose, the regional office may intimate the SBP BSC office three days in advance so that necessary arrangements for receipt of the bonds can be made.

It is imperative to mention that a notice regarding the above / mentioned facilities must be displayed at prominent places within branch premises for awareness and information of general public.

June 24, 2019
Non-ATL persons to pay double amount of withholding tax on prize bond winning

ISLAMABAD: The government has increased withholding tax by 100 percent on winning of prize bonds for persons not on Active Taxpayers List (ATL).

Through Finance Bill 2019 the government has deleted the term ‘non-filers’ and imposed 100 percent withholding tax on persons not on the ATL, which contains names of persons file their returns by due date of a tax year.

The rate of withholding tax on prize bond, cross-word puzzle and prize on winnings remains unchanged, however, the categorized rates of non-filer are proposed to be abolished.

The amendment proposed through the Finance Bill 2019, the rate of withholding tax on winning of prize bonds and other lottery schemes shall be:

The rate of tax to be deducted under section 156 on a prize on prize bond or cross-word puzzle shall be 15 percent of the gross amount paid.

The rate of tax to be deducted under section 156 on winnings from a raffle, lottery, prize on winning a quiz, prize offered by a company for promotion of sale, shall be 20 percent of the gross amount paid.

For the person winning the prize but not on the ATL shall pay double the amount as withholding tax.

June 16, 2019
National Savings to issue registered prize bonds in all denominations

ISLAMABAD: The Central Directorate of National Savings (CDNS) to issue scripless registered prize bonds amongst all denominations with objective to document the economy.

Economic Survey 2018/2019 released by the finance ministry of Monday, said that in collaboration with SBP, National Savings is in the process of introduction of registered scripless prize bonds amongst all denominations.

The registered prize bonds will be a step towards documentation of the economy while providing facility to the general public.

The CDNS remained in the process of restructuring and transformation in the Fiscal Year 2019. In this regard, the achievements made in the first nine months and initiatives in the pipeline are as under:

IT Transformation:

Starting from 2002-03, National Savings has gone a long way towards computerization and automation of its processes.

Out of 375 National Savings Centers (NSCs), 222 have been computerized. In the last one year, some more milestones have been achieved for transformation of the organization into an Information Technology enabled entity.

i. A data center has been established at National Telecommunication Corporation (NTC) and now 205 NSCs are connected to centralized location through Wide Area Network (WAN) whereas NTC is working for provisioning of connectivity at remaining NSCs.

ii. CDNS Main Application System has been upgraded into state-of-the-art Business Application Solution and deployed at 35 National Savings Centers while remaining NSCs are in the process of migration to the centralized architecture by using the newly upgraded Business Application Solution. The aforesaid achievement has enabled CDNS for provisioning of advance, efficient and value-added services to its customers using Alternative Deliver Channels (ADCs) i.e. Debit/ATM Cards, etc.

iii. Protocols have been laid down with National Database Registration Authority (NADRA) for obtaining Verisys and Biosys, which are necessary in the new digitized set up of the organization.

iv. Vendor has been selected for providing the card (ATM/Debit Card) solution for CDNS.

v. Agreement with 1Linkhas been signed for providing connectivity with banking sector/ATM operations.

Achievement of Annual Targets:

CDNS, being the foremost institution providing the avenue to general public to park their savings has been able to not only achieve the targets assigned but also surpassed by a big margin. As of 30.04.2019, the CDNS has achieved 213 % of the Gross and 191% of proportionate targets.

Initiatives in the Pipeline:

Sharia Product of National Savings

There was a persistent demand of Sharia compliant product and CDNS has responded to it and has developed its first-ever Sharia Compliant product called Sarwa Islamic Savings Account (SISA) for those who desire to invest only in the Sharia-compliant scheme of CDNS. The Draft rules for it have been printed in the Gazette of Pakistan and after approval of the Cabinet Committee for Disposal of Legislative Cases (CCLC) and the Federal Cabinet, the proposed SISA Scheme will be introduced across the country.

Overseas Pakistanis Savings Certificates (OPSCs)

The Pakistani diaspora abroad wanted to have a secure investment channel for their savings while Government of Pakistan, in order to increase more also looked for bringing remittances into formal money channels which were mostly coming via informal channels. In this regard, to fill the void, OPSCs has been designed as a product by CDNS to be launched for Overseas Pakistanis only. It will be launched initially in the Gulf Cooperation Council (GCC) market and then other countries. The Agreement with Manger To the Issue (MTI) has been almost finalized. Being a scripless security, OPSCs will be offered in both the US$ and rupee currencies. It is expected that they will be launched in the Fiscal Year 2019-20.

Launch of Rs. 100,000 Premium Prize Bond (Registered)

After successful launch of Rs.40000, Premium Prize Bond (Registered) National Savings is in the process of launching another registered prize bond for Rs. 100,000

Debit Card Launch & Membership of 1Link System

In near future National Savings is launching ATM Debit Cards with the support of the Karandaaz Pakistan.

June 11, 2019

Prize bonds investment soars by 17.07 percent to Rs929.64bn

KARACHI: The investment in prize bonds has soared to Rs929.64 billion by January 2019 as compared with Rs794.09 billion by the same month of the last year, showing an increase of 17.07 percent.

According to statistics issued by State Bank of Pakistan (SBP), the savings mobilized through prize bonds had increased to Rs929.64 billion January 2019 through different categories of prize bonds.

The statistics have shown the investment in higher denomination prize bonds increased more rapidly then the lower denomination.

Following is the position of investments in different prize bonds:

(Rs in million)

S. No.	Prize Bonds	Jan 2019	Jan 2018	% Increase
01	Rs100	9,771	8,795	11.09
02	Rs200	29,325	27,076	8.30
03	Rs750	98,590	86,520	13.95
04	Rs1,500	105,019	90,078	16.58
05	Rs7,500	96,221	75,317	27.75
06	Rs15,000	173,803	144,780	20.04
07	Rs25,000	156,923	135,080	16.17
08	Rs40,000	259,130	225,586	14.86

March 24, 2019