Introduction to the series on Financial Inclusion Research:
This press release is part of a special series that aim to foster an empirical understanding of financial inclusion in Pakistan and hope to create a collaborative network of individuals working on the topic.
This particular press release aims to determine the proportion of Pakistanis who believe in the use of prize bonds in Pakistan.
Introduction to Prize Bonds
Prize Bond, as the name suggests, are Bonds issued by a Government, which do not promise any interest, but award a prize, determined by a draw held at fixed date or regular intervals. Prize Bonds are investment and are bearer type of security available in different denominations.
The First Prize Bonds in the sub-continent were issued on sale in denominations of Rs.10 and Rs.100, by the undivided Indian Government on 15th January, 1944 and could be cashed on any date after 15th January, 1949. These were called “Five Year interest-free Bonds 1949”.
After the partition of sub-continent, Pakistan first issued the interest-free “National Prize Bonds” of Rs.10 in October 1960, managed by the ‘Central Directorate of National Savings’ (CDNS). The Prize Bonds were launched by the then Minister, Gen. K.M. Shaikh, and the first Bond was also purchased by him. Later Rs.5, 11, 50, 100, 500, 1000, 5000, 10000 & 25000 denomination Prize Bonds were issued.
The draw of each Prize Bond was held every three months, with the first draw held in January 1961. The traditional drum was used initially for the draw, but imported machines similar to slot machines were later used. The draws were supervised by draw committees, with the chairman being a senior Government officer, and members from the state Bank of Pakistan and CDNS. Rs. 200, 750, 1500, 7500, 15000, 25000 & 40000 denomination Bonds are currently in circulation.
A nationally representative sample of men and women from across the four provinces was asked, “I am going to tell you financial services and products. For each of them, please, tell me if you use it or have it now (Savings in Prize Bonds)” In response to this question, 3% Pakistanis said yes, while 97% said no.