ISLAMABAD: The Federal Cabinet which is scheduled to meet on Tuesday (July 2) with Prime Minister in the chair will approve withdrawal of Prize Bonds of Rs 40,000, well-informed sources told Business Recorder.

The Central Directorate of National Savings (CDNS), an attached department of the Finance Division, plays a vital role in mobilizing domestic savings through National Savings Schemes (NSSs), and thereby provides budgetary support as non-bank financing and helps in managing inflationary pressures.

Giving the background, the sources said, CDNS has proposed withdrawal of National Prize Bonds (bearer) of higher denominations from circulation in line with the vision of the present government’s ongoing drive to enhance documentation of the economy. The proposal seeks withdrawal of prize bonds under sub-rule 1 of rule 4 of ‘the Prize Bond Rules 1999’ and their replacement has already been successfully launched notably premium prize bonds (registered) of Rs 40,000 denomination which offer both biannual profit as well prize on quarterly draws.

The ECC in its meeting held on June 19, 2019 under the chairmanship of Advisor to Prime Minister on Finance, Revenue and Economic Affairs, considered the proposal and recommended withdrawal of prize bonds (bearer) of Rs 40,000 denomination from circulation for approval of the cabinet, as required under sub-rule 1 of the rule 4 of ‘the Prize Bond Rules 1991’ and introduction of requisite amendments in the rules to provide options for replacement of the bond/s up to March 31, 2020 as follows: (i) conversion to premium prize bonds (registered): the bonds can be converted to premium prize bonds (registered) through the 16 field offices of SBP Banking Services Corporation and authorised branches of six commercial banks’ ie, National Bank of Pakistan, Habib Bank Limited, United Bank Limited, MCB Bank limited, Allied Bank Limited and Bank Alfalah Limited; (ii) replacement with SSC/DSC: bonds can be replaced with Special Savings Certificates/Defense Saving Certificates through 16 field offices of SBP BSC, authorized commercial banks and National Savings Centers; (iii) encashment: bonds can be encashed and proceeds shall be transferred to the bond holder’s bank account through 16 field offices of SBP Banking Services Corporation (SBP BSC) as well as commercial bank branches.

For this purpose, draft notification incorporating necessary provisions/amendments in the National Prize Bond Rules, 1999 has been proposed in consultation with State Bank of Pakistan.

The Finance Division has proposed that Federal Cabinet may approve the recommendation of the ECC and draft notification for withdrawal of Rs 40,000 bearer prize bonds.—MUSHTAQ GHUMMAN