The government has decided to introduce 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.
These bonds will be purchased and redeemed through a mobile application linked to the buyer’s bank account or a savings account maintained with the Directorate of National Savings (CDNS).
Unlike conventional prize bonds, the digital bonds will be registered in the name of the purchaser, thereby reducing the chances of theft, loss, or misuse. Officials believe this initiative will also curb the use of prize bonds for undocumented transactions and contribute to better financial accountability.
Paperless transactions
The move is expected to reduce the administrative costs associated with printing and logistics while making the entire process more accessible to investors. A senior finance ministry official told Dawn that the initiative aligns with the government’s broader objective of digitising financial services and integrating 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 mechanism, an adult Pakistani citizen will be able to purchase the digital bonds via the National Savings Mobile App or any other channel authorised by CDNS. Payments for purchases will be made through the buyer’s linked bank account or CDNS savings account.
Tax implications and prize draws
The prize money for digital bonds will be subject to taxation but exempt from Zakat deductions. The Ministry of Finance will determine the prize amounts for each draw, which will be held quarterly or as notified by the government.
CDNS will announce the draw schedule at the start of each calendar year, with winnings being directly credited to the investor’s linked bank account or savings account.
Furthermore, buyers will have the option to nominate a beneficiary at the time of purchase. In the event of the investor’s death, the principal amount and any prize winnings will be transferred to the legal heirs upon submission of a succession certificate. If the total claim does not exceed Rs500,000, the payment will be made to the nominee specified at the time of purchase.
The government believes that this initiative will not only modernise the prize bond system but also help in documenting financial transactions, thereby strengthening efforts against illicit money flows.
