Govt stops selling prize bonds of Rs7,500, Rs15,000

ISLAMABAD: In order to comply with the Financial Action Task Force (FATF) conditions, the government has stopped selling bearer prize bonds of Rs7,500 and Rs15,000 with immediate effect.

Pakistan had to comply with the FATF requirements and one of the conditions was to stop selling bearer prize bonds. The FATF wants documentation of the economy, so it placed the requirement of selling registered prize bonds of Rs25,000 and Rs40,000.

In a notification issued here by the Ministry of Finance on Thursday, in terms of sub rule 1 of rule 4 of National Prize Bonds Rules 1999, the Finance Division with the approval of Minister In Charge, is pleased to withdraw Rs7,500 denominated National Prize Bond from circulation with immediate effect. In another notification, the government has also withdrawn Rs15,000 denominated prize bonds as well. Earlier, the government had stopped selling Rs25,000 and Rs40,000 denominated bonds.

Now the biggest prize bond will be Rs1,500 available in the market. The official sources said that although the discount rate was not too much high at the moment but the government had stopped the cheapest mode of getting financing of the budget deficit through prize bonds.

“Over Rs100 billion were invested into prize bonds of Rs7,500 and Rs1,500 bearer bonds by people,” said the official and added that the next draw was scheduled for next week but now the government had stopped its sale with immediate effect.

There are certain options available including 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, replacement with Special Savings Certificate (SSC) and Defense Saving Certificate (DSC) and encashment at face value.