Around Rs177 billion has been documented since the termination of Rs40,000 denomination bearer prize bonds, announced by the fiscally strapped government in June as part of its ongoing clampdown on the rampant black economic activities.
According to official statistics made available to The News on Friday, the total investment in bearer prize bonds of Rs40,000 denomination fell to Rs81.38 billion by July-end 2019 as compared with Rs258 billion in May 2019.
The government discontinued these prize bonds through a notification on June 24, 2019. In compliance to the government announcement the State Bank of Pakistan (SBP) had also issued procedure for the banks to facilitate general public in exchanging the unregistered prize bonds through three different modes.
The SBP said these bearer prize bonds cannot be exchanged against cash; however, they can be redeemed against registered prize bonds or converted into national saving schemes or face value (direct transfer to the bank account of bond holder).
The SBP informed the banks that such prize bonds would not be sold after June 24, 2019 and would also not be encashed/redeemed after March 31, 2020, while no further draws shall be held for the same.
Due to replacement of the bearer prize bonds of Rs40,000 denomination, the total investment in prize bonds fell to Rs766 billion by July 2019, compared with Rs951.64 billion by May 2019. The bearer instruments have been known as a parking lot for undocumented economy. Therefore, the government launched registered prize bonds of Rs40,000 denomination in March 2017 which could be purchased against certain requirements including Computerized National Identity Card and a valid bank account.
Till May 2019 the total investment in premium prize bonds was Rs6.17 billion. But after the restriction imposed on bearer bonds, the investment in registered prize bonds increased to Rs13.26 billion by end-July 2019.
According to the SBP the bearer instrument can be exchanged in savings schemes such as Special Saving Certificates (SSC) or Defence Saving Certificates (DSC). The total investment into the saving certificates increased to Rs2.24 trillion by June 2019 as against Rs2.20 trillion By May 2019.
The government aims to transform all the bearer prize bonds into registered scrips. In this regard the Central Directorate of National Savings in collaboration with the SBP is planning to issue scripless registered prize bonds amongst all denominations with the objective to document the economy.
Source: SBP, The News