Friday Feb 19, 2021
KARACHI: Since the government imposed a ban on unregistered prize bonds, the investment in registered or premium prize bonds has surged by 29% to Rs22.8 billion in the last year, according to the official data available with The News.
The publication reported that the sale of premium prize bonds of Rs40,000 and Rs25,000 stood at Rs17.71 billion by the end of 2019.
The finance ministry had decided to stop the circulation of bearer prize bonds of Rs25,000 in December 2020 and the cutoff date to exchange was set at May 31 this year.
The investment in premium prize bonds of Rs40,000 denomination increased to Rs21 billion by December 2020 compared with Rs17.7 billion a year ago.
The ministry had notified to discontinue the bearer or unregistered bonds of Rs40,000 on June 24, 2019. The bearer bonds of Rs40,000 were to be discontinued for legal tender by March 2020. However, the date was extended up to December 30, 2021.
Government data showed that in the first month of discontinuation of Rs25,000 denomination bearer prize bonds, Rs1.7 billion was invested in premium bonds of the same denomination.
Read more: Prize Bond Schedule 2021
However, after the ban on prize bonds the investors surrendered around Rs47 billion in bearer prize bonds of Rs25,000 denomination during the month.
The stock of bearer bonds of Rs40,000 has been reduced to Rs1.8 billion by December 30, 2020, as compared with the stock of Rs14.6 billion a year ago.
The government launched the premium prize bonds of high denominations to encourage documentation of the economy. The bonds are available against a valid CNIC and at fixed profit rates besides prize money.
The investment in premium prize bonds remained attractive as the government announced to withdraw same denomination unregistered prize bonds, which is partly to eliminate all unregistered debt securities to ensure a verified source of income and comply with the requirements of the Financial Action Task Force (FATF).
The Ministry of Finance, in early January last year, issued rules ‘National Saving Schemes (AML and CFT) Rules, 2019’ to curb money used for terror financing and money laundering.
Under these rules, the authority is to collect all information of persons investing in saving schemes. The information shall include name, address, CNIC, passport etc.
Investors are required to provide a source of money for the invested amount.