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Islamabad: The Federal Government has proposed the Digital Prize Bonds (Registered) Rules, 2024, which will come into immediate effect, according to a notification issued by the Finance Division. The move aims to modernize the country’s savings and investment landscape by shifting to a fully digital, scrip-less system.
The proposed regulations will permit the Central Directorate of National Savings (CDNS) and other authorised offices to issue bonds, and the Finance Division will notify the available denominations in the official gazette. The digital prize bond system eliminates constraints on maximum investment, giving investors greater control over their financial assets.
The CDNS will sell all bonds at multiples of their face value, with system-generated numbers replacing traditional printed documentation. To purchase bonds and manage them, investors must use their CDNS mobile app and authorised platforms.
Investors can initiate digital prize bond transactions using the Digital Prize Bond (DPB) Gateway, which requires them to register and link their CDNS Savings Account or any other bank account in IBAN format. Payment transfers from connected accounts will make the date of completed transactions the official purchase date.
All bondholders must execute redemption operations using the DPB Gateway, after which the due amount will be credited to their initial payment account. CDNS has the authority to process payments using government cheques in extraordinary circumstances.
Quarterly Draws and Prize Money Distribution
The CDNS will conduct quarterly draws, or as determined by the Finance Division, with the annual draw schedule to be notified in the official gazette. The prize amount will be credited directly to the registered account of all winning bondholders.
Bondholders are required to retrieve any prize money that is returned to the office of issue by a financial institution within a six-year period. After six years, the government will cease disbursing any funds, unless the prize money is not claimed. The distribution of prize money is regulated by the tax laws of the country, and the unclaimed prize amount is exempt from profit payments.
The Finance Division has the authority to withdraw any bond from general circulation through an official notification. The office of issue will not acknowledge any prize money claims following the withdrawal of bonds. Additionally, the bonds:
- Cannot be transferred or pledged as collateral.
- Will remain valid indefinitely unless withdrawn by the government or encashed by the holder.
- Any erroneous payments made under these rules will be recoverable as arrears of land revenue.
Nomination and Legal Heirship
Investors can nominate beneficiaries at the time of purchase or later via the DPB Gateway. This nomination can be modified or canceled at any time. In case of the bondholder’s death:
- A Familial Registration Certificate from NADRA and an affidavit regarding equitable legal progeny distribution are required for the nominee to claim funds that do not exceed Rs500,000.
- Claim processors are required to acquire a succession certificate when the nominee is under legal age restrictions or there is a lack of valid nomination.
Zakat tax requirements are automatically waived for digital prize bond investors and their prize funds. The prize money acquired from these bonds is still subject to Pakistan’s official tax regulations.
The CDNS will establish comprehensive operational guidelines that encompass all necessary procedures for the sale of bonds, their redemption, and the distribution of reward money, as well as other critical operational steps, to ensure the successful implementation of the program.
The Digital Prize Bonds (Registered) Rules, 2024, remain in the proposal stage and are subject to further review. The government aims to introduce these regulations to enhance transparency, modernize the financial sector, and encourage digital transactions.
