The State Bank of Pakistan (SBP) has just issued strict new directives for commercial banks. SBP now explicitly requires banks to settle all Premium Prize Bonds (PPB) sale transactions on the exact same day. Consequently, this revised reporting and settlement mechanism aims to significantly improve operational efficiency across the sector.
Under the newly introduced SBP framework, banks must report their Premium Prize Bonds (PPB) sales rapidly. Specifically, institutions will utilize the Data Acquisition Portal (DAP) to log transactions within strict, prescribed timelines. Based directly on these reported sales, the SBP Banking Services Corporation (SBP BSC) will step in. Accordingly, the SBP BSC will debit the respective bank’s account on a daily basis.
Furthermore, the central bank will not tolerate reporting lags. Commercial banks that fail to settle their sale proceeds on the same day will face mandatory financial penalties. As a result, the SBP will impose “use of funds charges” for the entire delayed period. To calculate these specific charges, the SBP will apply its overnight reverse repo ceiling rate.
Subsequently, the SBP BSC’s Karachi office will oversee the penalty execution. The office will calculate the exact charges and recover the funds by debiting the concerned bank’s account. Finally, they will credit the recovered penalty to the Central (Non Food) Account.
Moreover, the central bank places the ultimate responsibility squarely on the commercial banks. The SBP stated that banks will face full liability for any profit or prize money paid incorrectly. Specifically, this applies to errors resulting from non-reporting, delayed reporting, or the misreporting of prize bond sales, encashments, or transfer transactions. However, the SBP noted that these liabilities remain subject to standard income tax adjustments where applicable.
