KARACHI: The State Bank of Pakistan (SBP) has issued new instructions regarding the withdrawal of the Rs40,000 denomination National Prize Bonds.
In a statement dated February 19, and addressed to all banks’ CEOs and presidents, the SBP reiterated that the last date replacement or the conversion of those bonds was March 31, 2020.
No requests for encashment, replacement or conversion of those prize bonds will be entertained by participating commercial banks on or after April 1, 2020, according to the instructions laid out by the SBP’s currency management department.
Additionally, the head offices of commercial banks will solicit details of prize bonds physically held by each branch or regional office on March 31, 2020, and report a consolidated bank-wide position to the currency management department on April 1.
The data submitted by commercial banks will also be subject to inspection by SBP Inspection Teams, the statement added.
The daily reporting of the encashment of those prize bonds will continue till March 31, 2020.
Commercial bank branches will also have to physically surrender prize bonds held by them to the concerned SBP Banking Services Corporation field office.
Previously on June 24, 2019, the Finance Division of the Government of Pakistan, via Notification No. F.16 (3) GSI/2014-1072, had restricted the sale of National Prize Bonds of Rs40,000 denomination after the said date.
This meant that no prize bond of Rs40,000 would be sold after June 24, 2019, and would not be redeemed or encashed after March 31, 2020.
Bondholders had the option to either convert the bond to a Premium Prize Bond, replace it with a Special Savings certificate, or encash it at face value.
Any bondholder could avail all three options through the 16 field offices of the SBP Banking Services Corporation, and the branches of six commercial banks: National Bank of Pakistan, Habib Bank, United Bank, MCB Bank, Allied Bank, and Bank Alfalah.
The Rs40,000 bond is the highest graded prize bond out of a total of eight denominations, starting from Rs100 to Rs40,000, and was introduced in 2017.
The government took the decision to stop issuing these premium prize bonds primarily to prevent the ‘whitening’ of ‘black’ money, and to stop tax-evasion. It had also hoped to appease the Financial Action Task Force (FATF). Pakistan remains on the FATF’s grey list.
