State Bank discontinues Rs40,000 denomination Bonds

remittances

Rs 40,000 denomination national prize bonds have been discontinued by the federal government. From Friday, 15th February Rs40,000 denomination bonds will not be issued by State Bank of Pakistan (SBP). The internal notification of the SBP stated that fresh bonds will not be issued.

Only the issuance of new bonds have been stopped thus it will not effect the investments made earlier.

The federal government gave directions to the Central Directorate of National Savings (CDNS) after which State Bank of Pakistan instructed its officials to stop Rs 40,000 bonds printing. Out of total 8 denominations, Rs40,000 bond is the highest denomination prize bond. The prize bonds range from Rs 100 to Rs 40,000.

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This decision will also address the concerns of watchdogs around the world who had their suspicions regarding the black money parking through these bonds.

Pakistan is presently on Financial Action Task Force (FATF) negative list. By November 2018 there was Rs910 billion in all types of prize bonds. Rs249.5 billion or 27.5% of the overall investments was just in the Rs40,000 denomination. Also the Rs15,000 denomination bonds attracted almost Rs168 billion investments from the general public.

It is believed that the prize bonds have been used for the purpose of whitening the black money. They have remained a source of corruption and tax avoidance in Pakistan.

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