SBP Tightens Prize Bond Reporting Rules for Banks

The State Bank of Pakistan (SBP) has issued new guidelines for banks processing Premium Prize Bond (PPB) transactions that tighten reporting and settlement procedures.

Under the new system, all revenues from PPB sale are to be settled by commercial banks on the same day. Moreover, banks are also obligated to submit their prize bond sales using the Data Acquisition Portal (DAP) in the authorised time frames.

SBP Banking Services Corporation (SBP BSC) would recover against the reported transactions from the appropriate bank’s account on daily basis.

Banks that fail to settle sale revenues on the same day will be required to pay use of funds penalties for the delay, the central bank said. Such charges shall be determined at the SBP’s overnight reverse repo ceiling rate applicable for the time of delay.

The SBP BSC Karachi office would compute and recover these charges by debiting the account of relevant bank and crediting the Central (Non Food) Account as per the circular.

The SBP also explained that banks will be liable for the whole amount of any prize or profit money paid incorrectly owing to non-reporting, late reporting or incorrect reporting of prize bond sale, encashment or transfer activities.

The amount payable by the bank will take into account any income tax adjustment that may apply.

The updated rules are aimed at improving accuracy of reporting, fast settlement and reducing errors in Premium Prize Bond transactions.