SBP makes daily reporting of Premium Prize Bonds sale mandatory for banks

The State Bank of Pakistan (SBP), reviewing the mechanism for reporting of Premium Prize Bonds (PPB)’ sale transactions on Thursday, directed all banks to settle all such transactions on the same day with SBP Banking Services Corporation.

“Any bank failing to settle the proceeds of sale transactions on the same day shall be liable to pay use of funds for the period of delay, calculated at the SBP Overnight Reverse Repo (Ceiling) rate prevailing on each day during such period,” a circular issued by SBP’s Currency Management Department outlined.

Referring to the SOP for issuance of registered PPBs through commercial banks and other relevant instructions, the central bank has informed that the decision was taken after reviewing the prevailing mechanism for reporting PPB sale transactions.

As per the decision, the settlement mechanism will involve reporting of Sale transactions of PPBs through DAP as per the prescribed timelines while SBP BSC Karachi office will debit the account of the bank based on the amount of sale reported by the concerned bank on daily basis. SBP BSC Karachi office is also made responsible for calculation and recovery of use of funds from the concerned bank.

Any commercial bank shall be liable for the gross amount in cases where profit or prize money is paid erroneously due to non-reporting, delayed reporting, or misreporting of sale or encashment or transfer transactions by the concerned bank, subject to adjustment of income tax, if so possible, the CMD circular read.