People throng SBP offices after govt withdraws bonds in Lahore

LAHORE: Following the State Bank of Pakistan’s (SBP) announcement to withdraw Rs40,000 denomination National Prize Bonds on Monday, a large number of prize bondholders on Wednesday visited the field offices of the SBP Banking Services Corporation in a panic to get their prize bonds encashed.

The SBP, on Monday, directed presidents and chief executive officers (CEOs) of all banks to stop the sale of Rs40,000 denomination prize bonds with immediate effect. The central bank has announced that no further draw of Rs40,000 denomination prize bond will be held and these prize bonds will not be encashed or redeemed after March 31, 2020.

To further tightening the noose on black money, the SBP has also barred cash payments against encashment of bonds and directed banks to convert these prize bonds into Premium Prize Bonds, Special Saving Certificate or Defence Saving Certificates that will be registered in the name of the investor.

The central bank has also allowed encashment of Rs40,000 denomination prize bonds at face value but directed banks to deposit encashment amount in prize bond holder’s bank account.

Following a sudden shift in the government’s policy, a large number of prize bond holds visited central bank and commercial banks’ branches for encashment of their prize bonds or to get information about encashment procedures.

Speaking to The Express Tribune, a citizen, Nousheen Rashid, said she heard on media that the government has withdrawn Rs40,000 denomination prize bonds. “I have three prize bonds of the said denomination. I came to the bank to get them encashed but bank officials told me it is only possible if I convert them into Premium Prize Bonds, Special Saving Certificate or Defence Saving Certificates. The staff told me that these bonds can only be encashed if I agree to deposit encashment amount in my bank account,” she highlighted.

Another citizen, Iqtidar Shah, disclosed that there were long queues in the central bank office as a large number of people were approaching a central bank to get their prize bonds to encash. It was really a cumbersome procedure for common citizens and difficult for black money holders to get them to encash over the counter. However, prize bond dealers have made prize bond encashment hassle-free by deploying their agents outside central and commercial banks who are buying Rs40,000 denomination prize bond against cash payment of Rs38,000 from common citizens, he highlighted.

Similar, experiences were narrated by several other citizens. A banker told The Express Tribune that it was being heard that after Rs40,000 prize bonds, cancellation of Rs5,000 currency note is also on the cards.

Earlier, he pointed out, it was difficult to get Rs5,000 currency notes from banks due to their limited availability. However, now bank tellers prefer to give Rs5,000 currency notes as people who has unaccounted wealth have started offloading their burden. 

Published in The Express Tribune, June 27^th, 2019.