KARACHI: The investment in premium prize bonds has surged 170 per cent, owing to the government’s initiative to stop the unregistered financial instruments from circulation.
According to the statistics released by the State Bank of Pakistan (SBP), the investment in premium prize bonds of denominations, including Rs25,000 and Rs40,000 increased to Rs51.34 billion by August 2021, compared with Rs18.98 billion by the end of the same month of the last year.
The sale of registered prize bonds of Rs40,000 denomination increased to Rs32.35 billion by the end of August 2021, compared with Rs18.98 billion in the same month of the last year.
Similarly, the sale of registered prize bonds of Rs25,000 denomination was at Rs18.99 billion by the end of August 2021.
The phenomenal growth in premium prize bonds may be attributed to the withdrawal of bearer bonds by the government.
According to the Central Directorate of National Savings (CDNS), the government had withdrawn bearer prize bonds of denominations, including Rs7,500, Rs15,000, Rs25,000 and Rs40,000. These bearer prize bonds may be exchanged or converted with the available premium prize bonds and other specified options.
The latest surge in premium prize bonds investment was due to the last date for converting the bearer prize bonds by September 30, 2021. However, the Finance Division through a notification extended the last date up to December 31, 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, while in April 2021, the Finance Ministry announced that the national prize bonds of denominations Rs7,500 and Rs15,000 would not be sold.
The Finance Division 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 the State Bank of Pakistan (SBP) Banking Services Corporation, and the branches of six commercial banks, i.e., the 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 the Special Saving Certificates/Defence Saving Certificates through the 16 field offices of the SBP Banking Services Corporation, authorised commercial banks, and the National Savings Center.
The bonds will only be encashed by transferring the proceeds to the bond holder’s bank account through the 16 field offices of the SBP Banking Services Corporation, as well as the authorised commercial bank branches and to the Saving Accounts at National Savings Centers.