Investment in Rs 40,000 and Rs 25,000 high-quality bonds grew by 29%

• Investment in Rs 40,000 premium bonus bonds to increase to Rs 21 billion by December 2020
• As of December 30, 2020, the stock of bearer bonds was Rs. 4 lakh crore, which has dropped to Rs.
• The government issues high-denomination bonus bonds to encourage economic development.

KARACHI: Investment in registered or prize bonus bonds grew 29 per cent to Rs 22.8 billion last year after the government banned issuance of unregistered bonus bonds, according to official data available with the government. news.

According to reports, sales of Rs 40,000 and Rs 25,000 bonus bonds had reached Rs 1,771 crore by the end of 2019.

The Ministry of Finance has decided to stop the circulation of Rs 25,000 bearer reward bonds in December 2020, with the redemption deadline set on May 31 this year.

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Rs 40,000 bonus bond investment surges

Investment in premium bonus bonds of Rs 40,000 face value increased to Rs 2,100 crore in December 2020 from Rs 1,770 crore a year ago.

The ministry had notified the cessation of issuance of Rs 40,000 bearer or unregistered bonds on June 24, 2019. The Rs 40,000 bearer bonds were to cease to be legal tender in March 2020. However, the date was extended to December 30, 2021.

Rs 25,000 Prize Bond

Government data showed that in the first month after the issuance of bearer prize bonds of Rs 25,000 face value was stopped, Rs 1.7 billion was invested in prize bonds of the same face value.

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However, after the ban on bonus bonds, investors abandoned around Rs 4,700 crore of Rs 25,000 bearer bonus bonds that month.

As of December 30, 2020, the stock of Rs 40,000 bearer bonds has reduced to Rs 1.8 billion, while a year ago the stock of the bonds was Rs 14.6 billion.

Financial Action Task Force requirements

The government issued high denomination bonus bonds to encourage economic development. These bonds were issued against valid CNICs and had a fixed profit rate in addition to the bonus.

Investment in bonus bonds remains attractive as the government announced the cancellation of unregistered bonus bonds of the same denomination, partly to eliminate all unregistered debt securities to ensure verifiability of income sources and comply with Financial Action Task Force (FATF) requirements.

In early January last year, the Ministry of Finance issued the National Savings Scheme (Anti-Money Laundering and Counter-Terrorism Financing) Rules, 2019 to curb funds used for terrorism financing and money laundering.

Under these regulations, the authorities will collect all the information of people who have invested in savings schemes. This information includes name, address, CNIC, passport, etc.

Investors are required to provide the source of funds for the investment amount.