Banned prize Bond in Pakistan

Introduction:

In a recent governmental crackdown, Pakistan has imposed a ban on prize bonds of denominations Rs 15,000, Rs 25,000, and Rs 40,000, signaling a significant shift in financial policies. This move aims to enhance transparency and curb illegal financial activities associated with these high-value prize bonds, impacting a wide spectrum of investors and reshaping the landscape of financial instruments in the country. As the government takes decisive steps to reform the financial sector, the banned prize bonds raise questions about the future of investment avenues and the broader implications for the economy.

 Table of contents:

Introduction Table of contents Denominations Banned Encashment Procedure Documents Required for Encashment Encashment of Withdrawn Denomination Claim of Prize Bonds  FAQ's

Denominations Banned:

at present, following four (04) denomination of countrywide prize bonds were withdrawn and their last date of encashment is 30.06.2024 :

1. Rs7,500/-
2. Rs15000
3. Rs25000
4. Rs40,000

the withdrawn denomination can be  redeemed or can be encashed in ay of the following ways:

1. Conversion to Premium Prize Bonds (Registered) 

2. Replacement with Special Savings Certificate (SSC) / Defence Savings Certificate (DSC) 

3. Encashment through Bank Account

one can convert the withdrawn denomination into premium bonds through SBP or below noted Banks:

1. National Bank of Pakistan
2. Habib Bank Limited
3. United Bank Limited
4. MCB Bank Limited 
5. Allied Bank limited
6. Bank Alfalah Limited
7. First Women Bank Limited
8. The Bank of Khyber
9. The Bank of Punjab 
10. Sindh Bank Limited
11. Bank Al-Habib Limited 
12. Habib Metropolitan Bank Limited
13. JS Bank Limited
14. Askari Bank Limited
15. Standard Chartered Bank (Pakistan) Limited
16. Soneri Bank Limited
17. Silk Bank Limited
18. Summit Bank Limited
19. Samba Bank Limited 

Encashment Procedure:

 On submission of request on the prescribed application form  at 16 field offices of SBP Banking Services Corporation, Commercial Banks or National Savings Centers, the proceeds of encashment shall be credited to the bondholder’s given bank account. 

Documents Required for Encashment:

 Request for conversion/encashment of withdrawn National Prize Bonds (Bearer) shall be submitted on the prescribed application form which is available at the following web link: https://www.sbp.org.pk/sbp_bsc/PB-Forms.asp .The requisite information/documents required for each encashment option is as follows: 

1. Conversion to Premium Prize Bonds (Registered): 

Legible copy of valid CNIC / SNIC, Account Maintenance Certificate (not older than one month from application date), Valid IBAN number 

2. Replacement with Special Savings Certificate (SSC) / Defense Savings Certificate (DSC):

 Legible copy of valid CNIC / SNIC 

3. Encashment through Bank Account:

Encashment of Withdrawn Denomination:

No. The withdrawn National Prize Bonds (Bearer) can only be encashed/redeemed through the following three options: 

1. Conversion to Premium Prize Bonds (Registered) 

2. Replacement with Special Savings Certificate (SSC) / Defence Savings Certificate (DSC) 

3. Encashment through Bank Account

Tax Deduction on Conversion:

Time Line For Encashment of Bonds:

No. There is no tax / deduction on conversion/encashment of face value.

Claim of Prize Bonds:

Under the governing rules, the prize money may be claimed by the holder of the prize bond at any time within a period of six years from the date of relevant draw There is no tax / deduction on conversion/encashment of face value.

 FAQ's:

1. What denominations of prize bonds were banned with the aid of the authorities of pakistan?

The government has banned prize bonds of denominations rs 15,000, rs 25,000, rs 40,000.

2. How can one encash or redeem the withdrawn denominations, and what are the available alternatives?

The withdrawn denominations can be transformed to premium prize bonds (registered), replaced with unique financial savings certificates (ssc) / defence financial savings certificates (dsc), or encashed through a bank account.

3. What is the procedure for encashment, and what documents are required?

To encash, one need to post a request at the prescribed software shape at designated places, and the proceeds could be credited to the bondholder’s financial institution account. Required files range for each encashment choice, such as a legible copy of a valid cnic / snic, account upkeep certificates, valid iban range, and many others.