State Bank of Pakistan tightens settlement mechanism of prize bonds
The State Bank of
Pakistan (SBP) has tightened the settlement mechanism for Premium Prize
Bonds (PPBs), directing banks to settle all sales transactions on the same day
they are reported.
The decision, announced through a circular issued on
Thursday, follows a review of the existing system for reporting and settling
PPB transactions.
Under the revised mechanism, commercial banks will be
required to report their Premium Prize Bond sales through the SBP’s Data
Acquisition Portal (DAP) within the prescribed timelines. The SBP Banking
Services Corporation (SBP BSC) will then debit the concerned bank’s account
each day based on the value of sales reported.
The central bank has made it clear that delays will come
at a cost. Any bank that fails to settle the proceeds of PPB sales on the same
day will have to pay charges for the use of funds during the period of delay.
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According to the SBP, these charges will be calculated
at the overnight reverse repo (ceiling) rate prevailing on each day of the
delay.
The SBP’s Karachi office will be responsible for
calculating and recovering these charges. The amount will be recovered by
debiting the concerned bank’s account, with a corresponding credit to the
Central (Non-Food) Account.
Banks to bear cost of reporting errors
The central bank has also placed greater financial
responsibility on banks in cases where reporting failures result in the
wrongful payment of prize money or profit.
If profit or prize money is paid incorrectly because a
bank fails to report, delays reporting, or misreports a sale, encashment or
transfer transaction, the concerned bank will be liable for the gross amount
wrongly paid.
The circular, however, allows for adjustment of income
tax where applicable.
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The revised rules are expected to strengthen
accountability in the Premium Prize Bond system by linking the timely reporting
of transactions directly with financial settlement and making banks responsible
for losses arising from reporting errors.
The move also underscores the SBP’s efforts to ensure greater accuracy,
transparency and discipline in the handling of prize bond transactions by
commercial banks.
Source: Dawn