Investment in Regd prize bonds up by 158pc: SBP

KARACHI: The investment in premium prize bonds has registered an unprecedented growth of 158 percent by the end of July 2021, as the deadline to exchange bearer prize bonds is fast approaching.
According to the statistics released by the State Bank of Pakistan (SBP) on Wednesday, the investment in premium (registered) prize bonds of Rs25,000 and Rs40,000 denominations surged to Rs49.24 billion by the end of July 2021, compared with Rs19.06 billion by the end of the corresponding period last year.
To comply with the conditions of the Financial Action Task Force (FATF) and to prevent money laundering and financing of terrorism, the government stopped the circulation of unregistered bonds with the denominations of Rs40,000, Rs25,000, Rs15,000 and Rs7,500. The last date to exchange/replace the unregistered bonds is September 30, 2021.
The investment in premium prize bonds of Rs40,000 denomination increased 64 per cent to Rs31.23 billion by July 2021, compared with Rs19.06 billion by the same month of the last year.
Similarly, investment in prize bonds of Rs25,000 denomination increased to Rs18 billion since December 10, 2020, when the government announced to stop the circulation of the bearer bonds of this denomination.
The government on June 24, 2019, announced to discontinue the circulation of Rs40,000 denomination national prize bonds. Similarly, on December 10, 2020, the government announced to discontinue the circulation of Rs25,000 denomination prize bonds. In April 2021, the Finance Ministry announced that the national prize bonds of Rs7,500 and Rs15,000 denominations would not be sold. The investors of bearer bonds of Rs40,000 denomination surrendered around Rs256 billion since June 24, 2019. The closing stock is Rs1.27 billion of this denomination by July 2021.
Similarly, Rs159 billion has been surrendered in bearer prize bonds with the denomination of Rs25,000. The closing stock is Rs4.42 billion by the end of July 2021. A huge amount in the denominations of prize bonds (bearer) of Rs15,000 and Rs7,500 has also been surrendered.
Meanwhile, the State Bank of Pakistan (SBP) has said that bank lending for the government’s flagship mark-up subsidy scheme, commonly known as Mera Pakistan Mera Ghar (MPMG), has picked up momentum.
In a statement on Wednesday, the central bank said that since the launch of the scheme, applications of Rs154 billion under MPMG have been received by banks and banks have approved housing finance of over Rs59 billion till August 31, 2021.
Similarly, the pace of disbursement under MPMG that was initially slow because of a number of factors, including the availability of housing units, has also picked up, the SBP said. By August 31, 2021, disbursement under the scheme had reached Rs11.5 billion, showing an increase of around Rs3.8 billion in August 2021.
On average, to date banks have approved 38 percent of the amount applied and 19 percent of the approved amount has been disbursed, the SBP said. These approval and disbursement ratios have similarly risen over the past few months as banks have put in place the needed upfront investment in procedures and technology to process applications for low-cost housing.
The SBP said that banks disbursed amounts in different stages of construction or purchase. Thus the pace of disbursement is contingent upon the speed of construction and completion of the purchasing process, it added.
Since the announcement of MPMG scheme last year, the SBP has taken various enabling steps such as introducing standardised and simple application form; adopting an informal income assessment model; providing relaxations in prudential regulations; establishing helpdesks at all SBP field offices; and designing a complaint portal supported by a network of focal persons of all banks across all geographical areas.
On the instructions of SBP, banks are accepting MPMG applications from over 8,000 dedicated branches across the country. Further, SBP has also allocated targets to each bank under MPMG.
An e-tracking system within each bank and a dedicated joint call center for the facilitation of the applicants have also been established. Naya Pakistan Housing Development Authority (NAPHDA) and Pakistan Banks’ Association (PBA), a representative body of banks, are fully supporting MPMG.
It is expected that with the ongoing efforts by SBP, government, and banks, bank finance for MPMG will gain further momentum in the days to come, said the central bank. – TLTP