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April 1, 2020

Rs40,000 bond registration deadline extended

Business

April 1, 2020

KARACHI: The government on Tuesday extended the last date for registration of Rs40,000 bearer prize bonds up to June-end this fiscal year, realising the difficulty of people in complying with the March 31st deadline amid lockdown.

Ministry of finance said it extended the last date for encashment/redemption of Rs40,000 denomination national prize bonds with immediate effect till June 30, 2020. The original date for the encashment was March 31.

“The prize bonds can be enchased using the options such as conversion to premium prize bonds (registered), replacement with special savings certificate or defence savings certificate and through bank account,” the ministry said in a statement.

In April 2017, the then government launched premium prize bonds that need computerised national identity card and active bank account of the investor.

Registered prize bonds offer attractive prizes through quarterly draws and pay reasonable profit through biannual coupon payments. All the payments are made to investor’s bank account through an automated system.

However, the pace of investment in the premium prize bonds was seen increasing from July 2019 after the discontinuation of the unregistered bearer bonds of Rs40,000 on June 24, 2019.

Unregistered bearer bond of Rs40,000 were to be completely discontinued as legal tender from March 31 this year.

That led to a massive withdrawal of investment from the bearer instrument as the total investment, which was at Rs258 billion in May 2019, came down to Rs14.54 billion as of December last year.

However, since the withdrawal of investment from bearer bonds was allowed only through prescribed mode, the money had become part of documented economy. Finance ministry said the registered bonds are secure and not prone to forgery and theft. Issuance, encashment and prize bond draws in respect of all other denominations of bearer prize bonds would continue as per exiting procedure, according to National Prize Bonds Rules 1999, it said.