Pakistan Discontinues Selling Prize Bonds Of Rs7,500, Rs15,000
To observe the Financial Action Task Force (FATF) conditions, the government has stopped selling bearer prize bonds of Rs7,500 and Rs15,000 on an immediate basis.
Pakistan had to follow the FATF requirements one of which was to stop selling bearer prize bonds. The documentation of the economy is required by FATF, so it imposed the need of selling registered prize bonds of Rs25,000 and Rs40,000.
According to a notification issued by the Ministry of Finance on Thursday and as per sub-rule 1 of rule 4 of National Prize Bonds Rules 1999, the Finance Division with the support of Minister In Charge has decided to withdraw the circulation of Rs7,500 denominated National Prize Bond with immediate effect.
The government has also withdrawn Rs15,000 denominated prize bonds in another notification. Previously, the selling of Rs25,000 and Rs40,000 denominated bonds had also stopped by the government.
The biggest prize bond now available in the market will be Rs1,500. According to the official sources, though the discount rate was not too high at present, through prize bonds, the government had stopped the most economical mode of getting financing of the budget deficit.
As per the official, “More than Rs100 billion were invested into prize bonds of Rs7,500 and Rs1,500 by people,” and the next draw was scheduled for next week but now the government has announced to stop its sale with immediate effect.
There are few options available to the bond’s holder. Firstly, conversion of premium prize bonds (registered) of Rs25,000 and Rs40,000 (subject to the adjustments of differential amount) through 16 field offices of SBP and branches of six commercial banks. Secondly, replacement with Special Savings Certificate (SSC) and Defense Saving Certificate (DSC) and lastly, encashment at face value.
The Rs7,500 price bond can be encashed by December 31, 2021, whereas the Rs15,000 bond can be redeemed by June 30, 2021.