Government Terminates Prize Bonds of Rs 7,500 & Rs 15,000
The bondholders can convert them into bearer bonds of Rs 25,000 and Rs 40,000 denominations after payment of additional amount
In line with FATF’s directives to curb money laundering and corruption, Pakistan’s government has announced to discontinue prize bonds worth Rs 15,000 and Rs 7,500.
In this regard, a notification has also been issued by the government. According to the circular, the bonds of Rs 7,500 can be redeemed until December 31 whereas, the bonds of Rs 15,000 denomination will turn uncashable after June 30.
They bondholders can convert them into bearer bonds of Rs 25,000 and Rs 40,000 denominations after payment of additional amount.
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The discontinued prize bonds can also be converted into savings and defence saving certificates, the notification read.
At present, sources say as much as Rs 126 billion are in circulation under Rs 7,500 unregistered security while the figure for Rs 15,000 prize bonds is Rs 190 billion which the government wants to incorporate formally.
Rationale behind the move
According to Finance Ministry officials, the Financial Action Task Force (FATF) fears that large denomination bonds are used in unscrupulous cash transactions in Pakistan.
This also creates difficulty in documenting the informal economy.
The task force also doubts that large denomination prize bonds could also be used in money laundering by proscribed terrorist organizations.
Earlier, in line with FATF’s directives, the government had discontinued Rs 25,000 and Rs 40,000 lottery.
Pakistan requires to show clear progress on FATF’s targets before its next review scheduled in June 2021.
