Prize bonds encashment deadline draws close

ISLAMABAD:-The deadline for the encashment of prize bonds worth Rs40,000, Rs25,000, Rs15,000 and Rs7,500 has drawn close. The government plans to phase out these prize bonds and after December 31 you won’t be able to encash prize bonds with these denominations if you own some of them.

If the government does not extend the date and some of the prize bonds are left with you, they would be worth no more than waste paper.

The government has already extended the deadline several times. Will it grant another extension?

Will the deadline for the return of prize bonds be extended?

The draws for the prize bonds of the four denominations have been stopped for good and the citizens who own these bonds have been directed to encash them or transfer them to premium bonds.

In this regard, the government has extended the deadline several times. The last three-month extension was announced before the September deadline, and the new deadline expires on December 31.

Will there be any further extension? A good deal of time has been given, so it seems unlikely that government will give more time for the return of all prize bonds. However, the deadline for some prize bonds will be extended.

The deadline for the return of prize bonds worth Rs40,000 is not likely to be extended, but more time may be given for the return of other prize bonds.

When did the process to phase out prize bonds begin?

The government had stopped buying and selling prize bonds worth Rs40,000 on June 24, 2019. The last date for the exchange of these bonds was March 30, 2020, according to the first deadline.

On December 9, 2020, it was decided to phase out prize bonds worth Rs25,000 while on April 29 the government decided to stop selling prize bonds worth Rs15,000 and Rs7,000.

In total, prize bonds of four denominations have been closed so far. Another four prize bonds of Rs100, Rs200, Rs750 and Rs1500 denominations are being bought, sold and drawn as usual.

Why prize bonds have been phased out?

The decision to phase out the prize bonds was taken in view of the recommendations from the Financial Action Task Force (FATF). The FATF claimed that the bonds did not specify ownership and there was no effective system to control prize bond trade.

The National Savings has abolished the existing procedure and introduced a registered system to replace it. Under the new system, premium bonds have been introduced in place of bonds worth Rs40,000 and Rs25,000.