The Government has decided to launch digital prize bonds, aiming to enhance transparency and financial documentation while eliminating the risks associated with physical bonds.
According to official documents and a summary prepared by the Ministry of Finance, the digital prize bonds will be available in denominations of Rs500, Rs1,000, Rs5,000, and Rs10,000.
Also check: Prize bond Schedule
These bonds will be bought and redeemed via a mobile application connected to the buyer’s bank account or a savings account with the Directorate of National Savings (CDNS).
Unlike traditional prize bonds, the digital bonds will be registered under the purchaser’s name, minimizing the risk of theft, loss, or misuse. Officials expect this initiative to help prevent the use of prize bonds for unrecorded transactions and enhance financial accountability.
Paperless transactions
The move is expected to decrease the administrative costs associated with printing and logistics while making the full process more accessible to investors. A senior finance ministry official informed Dawn that this initiative supports the government’s broader goal of digitizing financial services and incorporating informal transactions into the formal economy.
“The transition to digital prize bonds will ensure that every transaction is traceable and secure. It is a significant step towards improving financial transparency,” the official said.
Under the new system, adult Pakistani citizens can purchase digital bonds through the National Savings Mobile App or any other CDNS-authorized platform. Payments will be processed via the buyer’s linked bank account or a savings account with CDNS.
Tax implications and prize draws
The prize money for digital bonds will be taxable but exempt from Zakat deductions. The Ministry of Finance will set the prize amounts for each draw, which will take place quarterly or as announced by the government.
CDNS will release the draw schedule at the beginning of each calendar year, and winnings will be directly deposited into the investor’s linked bank or savings account.
Additionally, buyers can designate a beneficiary at the time of purchase. In the event of the investor’s passing, the principal amount and any prize winnings will be transferred to the legal heirs upon submission of a succession certificate. If the total claim is Rs500,000 or less, the payment will be made to the nominee specified at the time of purchase.
Further, government believes this will not only modernize the prize bond system but also help in documenting financial transactions, thereby strengthening efforts against illicit money flows.