Government discontinues Rs25,000 prize bonds

ISLAMABAD: The government on Thursday discontinued prize bonds with Rs25,000 denomination and set a six-month deadline for investors to redeem or encash the popular investment instrument, in a second phase of documenting multibillion rupees worth of bond market.

National prize bonds of Rs25,000 denomination will not be sold with immediate effect and will not be encashed / redeemed after 31st May, 2021, according to a finance ministry’s decision.

Although cash payment for encashments of cited bonds is not allowed, bondholders can convert Rs25,000 denomination premium prize bonds (registered) through the 16 field offices of SBP Banking Services Corporation, and branches of six authorised commercial banks, including National Bank of Pakistan, Habib Bank Limited, United Bank Limited, MCB Bank Limited, Allied Bank Limited and Bank Alfalah Limited.

The authorised banks will also issue Rs25,000 denomination premium prize bonds (registered) as per the prescribed procedure, with immediate effect.

“Stock of the same has already been delivered to authorised commercial banks,” the finance ministry said in a statement. “The bondholder shall be required to submit a written request for conversion of bearer bonds to Rs25,000 premium prize bonds (registered) on the prescribed application form.”

The government launched premium prize bonds in April 2017 to document the economy. In June, the finance division restricted the sale of national prize bonds (bearer) of Rs40,000 denomination after June 24, 2019. However, the deadline was extended to December 30, 2021.

The ministry said the bondholder will also be required to submit prescribed application forms for registration / purchase of premium prize bonds as per the procedure in vogue. The bonds can be replaced with special savings certificate (SSC) / defence savings certificate (DSC) through the 16 field offices of SBP Banking Services Corporation, authorized commercial banks and National Savings Centres. “All authorised banks will, therefore, accept requests for replacement of bearer bonds with SSC or DSC on the prescribed application form,” it said. “The bondholder shall also be required to submit application form for purchase of SSC / DSC as per the prescribed procedure.”

The bonds will only be encashed by transferring the proceeds to the bond holder’s bank account through the 16 field offices of SBP Banking Services Corporation, at authorised commercial bank branches and to the savings accounts at National Savings Centres. All banks will receive request for encashment of bearer bonds on the prescribed application form. A copy of the application form, duly signed and stamped, will be provided to the bondholder as an acknowledgement receipt.