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State bank of Pakistan BSC (FSD)

2017

STATE BANK
OF
PAKISTAN
(SBP)
BANKING SERVICES
CORPORATION
(BSC), FAISALABAD

PRIZE BOND UNIT


[INTERNSHIP REPORT]
10 JULY 2017 – 18 AUG 2017

[Date] 1
State bank of Pakistan BSC (FSD)

Submitted To: Mr. YASIR RANA ABBAS


ACM (Prize Bond Unit)
Submitted By: “GROUP H’’
ANMOL MARYAM
GC Women University, Faisalabad.
M. IKARMAH WARRAICH
GC University, Faisalabad.

[Date] 2
State bank of Pakistan BSC (FSD)

ACKNOWLEDGEMENT

The internship opportunity we had with State Bank of Pakistan (Banking Services Corporation)
was a great chance for learning and professional development. Therefore, we consider ourselves
as very lucky individuals as we were provided with an opportunity to be a part of it. We are also
grateful for having a chance to meet so many wonderful people and professionals who led us
through this Internship period.

Bearing in mind previous we are using this opportunity to express our deepest gratitude and
special thanks to Mr. Yasir Abbas Rana the Assistant Chief Manager of Prize Bond Unit, who in
spite of being extraordinarily busy with his duties, took time out to hear, guide and keep us on
the correct path and allowing us to carry out our project at their esteemed organization and
extending during the training. We express our deepest thanks to Co. Supervisor Mr. Qaiser, the
senior officer for taking part in useful decision & giving necessary advices and guidance and
arranged all facilities to make life easier. We chose this moment to acknowledge his contribution
gratefully.

It is our radiant sentiment to place on record our best regards, deepest sense of gratitude to
Mr.Haroon Fiaz, the senior officer Admin for his careful and precious guidance which were
extremely valuable for our studies both theoretically and practically.

We perceive this opportunity as a big milestone in our career development. We will strive to use
gained skills and knowledge in the best possible way, and we will continue to work on their
improvement, in order to attain desired career objectives. Hope to continue cooperation with all
of you in the future, sincerely,

a consideration or estimate of the similarities or dissimilarities between two things or people.

[Date] 3
State bank of Pakistan BSC (FSD)

Contents
1-PRIZE BOND DIVISION (PBU): .......................................................................4
1.1-Prize Bond Unit...............................................................................................5
2.1-Securities Unit .................................................................................................5
1-1-Prize bond Unit:.................................................................................................5
Bearer Prize bond:- ..............................................................................................5
Open and shut period:...............................................................................................5
Premium prize bond: ...............................................................................................5
Procedure for claim: .............................................................................................6
OUR EXPERIENCE AT PRIZE BOND UNIT: ...............................................6
FLOW CHARTS FOR THE CLAIMS OF PRIZE MONEY .............................7
SMALL PRIZE MONEY CLAIM PROCEDURE ..............................................7
BIG PRIZE MONEY CLAIM PROCEDURE .....................................................9
2.1-Securities Unit:- ...............................................................................................12
I -Special Savings Certificate: ...............................................................................12
OTHER TASKS OF PRIZE BOND UNIT..........................................................13
Payment of Commission to commercial banks: ..................................................13
Government credit: ................................................................................................13
Administration: ......................................................................................................13
Sub Office Vault:....................................................................................................13
Local/Central Accounts: ........................................................................................13
Main Vault: .............................................................................................................13

1-PRIZE BOND DIVISION (PBU):

The Prize Bond Division (PBD) Consist of two units. Namely:

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State bank of Pakistan BSC (FSD)

1.1-Prize Bond Unit


2.1-Securities Unit

1-1-Prize bond Unit:

Prize bond unit deals with bearer prize bond as well as premium prize bond (Registered).
Bearer Prize bond:-
Prize Bonds are a form of Federal Government Security issued under Public Debt Act, 1944.
Prize bond is the bearer instrument and is type of a debt for government from general public.
Central Directorate of National Savings (CDNS) is the owner of this scheme and decides in all
policy related matters with regard to this scheme. Prize Bonds are printed by PSPC. State bank of
Pakistan issued the prize bond on behalf of the government. Generation of funds and the usage of
funds in the productive manner is the main reason behind the issuance of prize bond. Sale and
purchase of bonds occurs in open period (duration of 1 month after draw) and is carried out
through the 16 Field offices of State bank of Pakistan. The bonds can be en-cashed at any time at
the cash counter of SBP BSC or any commercial bank, after checking that bond is genuine or
not. The draw is held by manual system as per Draw Schedule issued by CDNS every year and
proper Draw committee is arranged. Draw of bonds of each denomination is held once in a
quarter in a year. To be included in draw it is necessary to purchase prize bond at least 2 months
before draw.
There are total 8 different denominations of prize bonds;
Rs.100, Rs.200, Rs.750, Rs.1, 500
(Small Denomination Bonds, draw held at every 15th date of quarter)
Rs.7, 500, Rs.15, 000, Rs.25, 000, Rs.40, 000
(High Denomination Bonds, draw held at every 1st date of quarter)
Issued by CDNS, government of Pakistan

Payment of prize money is started right after the execution of draw result. The prize money can
be claimed within the six years at any SBP BSC, otherwise the claim will expire. 15% of with-
holding tax is deducted from the prize money for filer and 25% WHT on non-filer.

Open and shut period:


Period of one month after the declaration of draw is called open period during which bonds can
be purchased and sold to general public.
Two months prior to the draw, is called the shut period, during which SBP stops selling prize
bonds however fresh bonds can be sold but will be included in the next upcoming draw on
completion of two months shut period.

Premium prize bond:

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State bank of Pakistan BSC (FSD)

Premium prize bond is registered in the name of investor. Premium prize bond is hybrid type of
prize bond as it gives profit @1.5% semiannually and quarterly prize money draws (at 10th of
month). Profit rates are decided by the CDNS (Central Directorate of National Savings).The
amount of profit and prize money is directly credited to the investor’s account. No profit is paid
for the broken period, and it also had alpha numeric numbers. It can be purchased from SBP
BSC. It is secure as it is registered. Currently it is issued in two denominations Rs.40, 000,
Rs.100, 000.

Following documents are required to acquire Premium Prize Bond.


• Copy of CNIC.
• Account Maintenance Certificate.
• Tax Certificate in case of Filer.
• Nominee CNIC details.

Procedure for claim:

The prize money which is below Rs.18,500 is paid on the same day (through one window
operation), and the prize which is more than Rs.18,500 and less than Rs.500,000 is paid within
next 20 working days, and the prize, which is above Rs.500,000 is paid after 30 working days.

Following documents are required for claiming the prize money below Rs.18, 500
• The form (PB 23) duly filled
• Photocopy of CNIC
• Photo copy of the prize winning bond duly signed by the applicant.

Following documents are required to claim prize money for above Rs.18, 500
• The form (PB 23-A, PB 32-A) duly filled
• Photocopy of CNIC
• Winning prize bond (original) duly signed by the applicant
• Photo copy of the prize winning bond duly signed by the applicant.
After the counter is closed a confirmation Email in form PB-59/60 containing number of the
bond, place of issue, date of issue, draw number and amount of prize money are sent to the PDOs
concerned i.e. Karachi & Lahore for their confirmation of outstanding position. All 16 SBP BSC
are divided into 2 PDOs (public debt office) to reduce the risk involved in payment of high prize
money. Then after complete confirmation of the prize money the bond is paid.

OUR EXPERIENCE AT PRIZE BOND UNIT:


We saw 4 counters working in prize bond unit. For payment of prize money these counters
perform following functions, Firstly at counter no 2, the holders of big prize money fill up the
required form (PB 23-A), attach above mentioned documents with it, and receive token after
submission of documents. And then again will do visit right after 20 or 30 working Days as per
requirement. Then at the end of the day all original bonds are moved to counter no 1 where all

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State bank of Pakistan BSC (FSD)

security features are checked out, and in case of prize more than Rs.100,000,000 after complete
verification from PSPC and concerned PDO, the payment orders are given to the prize holder.
Then he/she will submit the payment order in his/her bank and will be cleared through clearing.
Sale and encashment of certificates DSC and SSC is occurred at counter no 3, and counter 4 is
the supporting counter in days of rush.

FLOW CHARTS FOR THE CLAIMS OF PRIZE MONEY


Following are the flow charts for the ease of the reader to know about how the prize money is
paid at SBP BSC’s (Banking Services Corporation) and the authorization procedures to get the
prize money.

The procedure for the payment of prize money is of two types. The small prize money which is
below Rs18500/- is paid at the same time the customer presents his/her bond.

Big prize money which is above Rs.18500/- is paid by the SBP BSC’s after complete procedures
of verification prescribed by the Head office Karachi.

SMALL PRIZE MONEY CLAIM PROCEDURE


Small prize money is “The prize which is below the amount of Rs18500/-.” When the draws are
held and prizes are announced, prize winners are required to present their winning bond for prize
money at the nearest field office of SBP. If the amount of prize money is less than Rs18500/-
then all the SBP BSC’s are allowed to pay that amount to that customer on the same day when
they present it in the field office.

When the customer present the winning bond at the field office of SBP BSC Faisalabad, he/she
is requested to present it at counter no 5,6,7 or 8, these counters are allotted for the payment of
small prize money by the SBP BSC Faisalabad. When bond is presented at counter, the customer
is required to fill a claim form in which he/she is supposed to mention his/her CNIC number with
the denomination of the winning bond and its numbers, as well as date of draw and draw
number. Customer also attaches his/her CNIC copy with the form and submits it to the above
mentioned counter.

The OG-1 officer sitting at the counter receives the documents and the winning bond. The officer
checks whether the bond is genuine and valid. After the verification of the bond and the claim
form, that officer counts the amount of the cash to be handed over to the customer and give it to
him/her.

The whole procedure is mentioned below in the form of a flow chart:

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State bank of Pakistan BSC (FSD)

CUSTOMER

CASH
BOND

CLAIM FORM
+CNIC COPY

COUNTER # 5,6,7,8

BOND VERIFICATION

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State bank of Pakistan BSC (FSD)

BIG PRIZE MONEY CLAIM PROCEDURE


Big prize money means that ‘The prize which is above the amount of Rs18500/-.” When the
draws are held and prizes are announced, prize winners are required to present their winning
bond for prize money at the nearest field office of SBP. If the amount of prize money is more
than Rs18500/-, then all the SBP field offices are supposed to pay that amount in a way
prescribed by the SBP BSC Head office.

When the customers present the winning bond at the field office of SBP BSC Faisalabad, he/she
is requested to present it at counter no 2, this counter is allotted for the payment of big prize
money by the SBP BSC Faisalabad. When bond is presented at counter, the customer is required
to fill a claim form which is named as PB 23-A in which he/she is supposed to mention his/her
CNIC number with the denomination of the winning bond and its numbers, as well as date of
draw and draw number. Customer is required to submit a photo copy and original bond duly
signed from the back side. Customer also attaches his/her CNIC copy with the form and submits
it to the above mentioned counter.

The forms along with bond are submitted to the counter mentioned above. The forms are
received by the OG 2 officer sitting at the counter, after receiving those forms the officer checks
in the GLOBUS system whether the bond number is in the prize list or not. After GLOBUS
verification the officer checks from the FBR portal whether the customer is a filer or a non-filer
so that the amount of WHT (Withholding tax) could be applied accordingly. When both the
procedures are verified then the receipt is made in the name and CNIC of the bond holder.
Before handing over the receipt it is a point to be noted the if the prize money is below 1million
then the officer sitting at the counter or an OG 2 officer can sign the receipt and give it to the
customer, if the prize money is above 1million then the receipt will be signed by the ACM
(Assistant Chief Manager) and the DCM (Deputy Chief Manager) as well. After signatures the
receipt is handed over to the customer by mentioning the time of 20 to 30 working days to come
back and claim the money.

After the procedure mentioned above, the bonds along with the form are transferred to counter
no. 1. The officer at that counter verifies the originality of the bond and the point to be noted
here is that if the prize money is below 1 million, then the bond verification is done by the officer
sitting at the counter no. 1. If the prize money is greater than 1 million, then the bond will be sent
all the way to PSPC (Pakistan Securities Printing Corporation) Karachi for the thorough
verification and after that it return back to the counter no.1 of the field office Faisalabad.

When the bonds are verified, the pay order in favor of the bond holder is printed by the officer at
the counter no. 1. After the pay order is printed, it is sent to the Assistant Chief Manager for
verification and signature. The pay order after the signatures of ACM is sent to the IMU (Internal
Monitoring Unit) for the audit purposes and authorization. The pay order after the IMU
verification is sent to the DCM (Deputy Chief Manager) for signatures. After all the signatures

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State bank of Pakistan BSC (FSD)

and verification procedures, the pay order is sent back to the counter no.1 and then the pay order
is handed over to the customer when he/she comes to claim by showing the receipt.

The whole procedure is mentioned below in the form of a flow chart:

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State bank of Pakistan BSC (FSD)

Arrows detail with respect to colors:


 PINK color arrows, Shows the flow of original bond.
 ORANGE color arrows, Shows how the receipt reaches the customer/prize money
claimer.
 PURPLE color arrows, Shows the flow of payment order.

CUSTOMER
Payment order given to customer Or
Receipt given back to customer CLAIMER

Form PB 23 A+CNIC copy if P.M. > 1 M, receipt signed by


Dully signed original bond copy OG 1, OG 2 Ofr.
DCM
ACM
COUNTER NO 2
If > 1 million
 Entry in Globus software
 Check filler or non-filler

IMU BOND
U If > 1 million if < 1 million

COUNTER NO 1
Signed by ACM PSP
At the end of day C
After verification
For verification

Makes payment order


Payment order

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State bank of Pakistan BSC (FSD)

2.1-Securities Unit:-
Securities unit deals with two types of securities:-

I -Special Savings Certificate:

The state bank of Pakistan, also in case of SSC, is acting like an agent. This three years’ maturity
scheme was introduced on 4th February, 1990.The CDNS had introduced Special Savings
Certificates (SSCs) with a view to provide assistance and saving opportunities to the middle and
lower income group, household and small investors to invest their savings in an investment
guaranteed by the government with a periodic return. However, investors with relatively higher
surplus income also tend to invest heavy amounts in this scheme to earn a handsome periodic
return on their investments.
These certificates are available in the denomination of Rs.500/-, Rs.1000/-, Rs.5, 000/-, Rs.10,
000/-, Rs.50, 000/-, Rs.100, 000/-, Rs.500, 000/- and Rs.1, 000,000/-. Profit is paid on the
completion of each period of six months. Current profit rate is 6% (change in rate depends on
monetary policy).
These certificates can be purchased from any National Savings Centre (NSC), Pakistan Post
Office (PPO), Authorized branches of Scheduled Banks and the offices of State Bank of
Pakistan (SBP) by filling in a prescribed form called SC-1, which is available at all the above
offices of issue free of cost. The minimum investment limit is Rs.500/-, however, there is no
maximum investment limit in the scheme.
Every citizen of Pakistan can purchase it (even minor on behalf of guardian).
These certificates are en-cashable at par any time after the date of purchase. However, no profit
is payable if the encashment is made before completion of six months.
In case of death of certificate holder payment is made to the legal heir on basis of succession
certificate obtained from court.

II-Defense Savings Certificate:


The state bank of Pakistan on the behalf of the government performs this function. The
Government of Pakistan introduced Defense Savings Certificate scheme in the year 1966. The
scheme has specifically been designed to meet the future requirements of the depositors,
provides an investment opportunity for 10 years maturity with attractive rate of return on
deposits to all income groups of the country.
These certificates are available in multiple denominations of Rs.500, Rs.1000, Rs.5000, Rs.10,
000, Rs.50, 000, Rs.100, 000, Rs.500, 000 and Rs.1, 000,000.
These certificates can be purchased from any National Savings Centre (NSC), Pakistan Post
Offices (PPO),
Authorized branches of Scheduled Banks and State Bank of Pakistan (SBP) by filling in a
prescribed form called SC-1, which is available at all the above offices of issue free of cost. A
copy of the Computerized National Identity Card (CNIC) The minimum investment limit is
Rs.500/-, however, there is no maximum investment limit in this scheme. These certificates are
en-cashable at par any time after the date of purchase. However, no profit is payable if
encashment is made before completion of one year.

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State bank of Pakistan BSC (FSD)

OTHER TASKS OF PRIZE BOND UNIT


Other tasks being performed in prize bond unit SBP BSC Faisalabad are:

Payment of Commission to commercial banks:


Normally commercial banks do not sell prize bond, but in some cases when commercial bank
sale prize bonds, then it charges commission @1.5%, which is paid on demand to them. So
payment of commission to commercial banks, according to number of bonds they do sell, is one
of the tasks of prize bond unit.

Government credit:
The unsold prize bonds whether with any commercial bank or any SBP BSC are listed in PB-35
as these unsold bonds are government’s property. So after draw and announcements of winning
prize bonds, intimation is send to the respective commercial banks to provide them information
about the winning prize bond. Then they deliver those prize bonds to SBP BSC’s prize bond unit,
which then submit all prize bonds in vault. A voucher is made by prize bond unit, & then send it
to banking division to credit the account of government with respective amounts of prize money
of winning prize bond, and the face value of those bonds, which are received from commercial
banks, is paid to commercial banks.

Administration:
Internal transfer/postings, disciplinary action and all staff matters pertaining to Prize Bonds
Zone are dealt by them. All the letters etc. are received and dispatched by them. Petty Cash
Register is also maintained thereat. The particulars of defective/defaced Prize Bonds, meant for
destruction, are entered in Register PB-17. Besides supervising all the work of this Unit, the
Assistant Chief Manager concerned is also responsible to pass the clearly payable Currency
Notes and Prize Bonds of all the denominations

Sub Office Vault:


The balance of Prize Bonds and Currency Notes received from Main Office Vaults are
maintained at two separate Vaults simultaneously by one Assistant Chief Manager posted
thereat. Besides entire working of the Vault, the list of defective bonds in Form PB-35 and prize-
winning (retained) bonds are prepared by the staff of Cash Department at Prize Bonds Vault.

Local/Central Accounts:
Maintain entire record of Sale/Encashment of all denomination of Prize Bonds. Receive fresh
bonds from Pakistan Security Printing Corporation and arranges its remittance to other offices of
Karachi PDO. Arrangements of prize draw at Karachi Office are made by them.

Main Vault:
Fresh Prize Bonds physically received and kept thereat. After having advice from Unit 2
(Accounts) both the prize bonds i.e. fresh and/or re-issuable are remitted to Offices under the
jurisdiction of Karachi PDO for sale thereat. Prepares statement of daily transactions affected in
Main Vault Prize Bonds are also issued to concern Banks there from. The list in Form PB-35 in
respect of re-issuable bonds remain unsold during shut period is also prepared by them.

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