internship report on the Procedure Of prize bond management in SBP(BSC) Quetta..

“Summer Internship Report 2014”

SBP (BSC) Quetta Page 1

Internship Report on the Procedures of Prize bond

Management in SBP BSC Quetta.

Submitted to:

Ma’am Neelofar Nazir

Submitted by:

Yasmeen (BUITEMS)

Faris (LUAWMS-Uthal)



Acknowledgement:

A debt of gratitude is owed to our Supervisors Ma’am Razia Ashraf & Sir Khalid Mehmood who

guided and helped us in completing our project. Special thanks to Sir Usman for his advice and

precious time in the completion of this report. The completion of this report would not have been

possible without their guidance and support.

We would also like to thank the whole staff of National Prize Bond unit who provides us all

necessary equipment in completing this report and the time they took out for us is really

appreciable. Special thanks to our Internship Co-coordinator Ma’am Neelofar Nazir whose

guidance and support gave us courage to complete our report. For us it was a unique experience

to be in SBP (BSC) and to do our internship. It helped us to get back our interest in the banking

sector and to have new plans for our future.

We would also like to thank all the people in SBP with their patience and openness they created

an enjoyable working environment.



Letter of Transmittal

September 16, 2014.

Ma’am Neelofar Nazir,

Summer Internship Program, 2014

SBP (BSC), Quetta.

Procedure of National Prize Bond Management in SBP (BSC) Quetta

Dear Ma’am,

The assignment has been completed by the knowledge that we have gathered from the “Prize

Bond Unit”. The Report on Procedure of National Prize Bond Management has been completed

All areas of the prize bond management i.e. Printing of Prize bond, Supply and delivery of Prize

Bond, Sale and encashment of Prize bond, Prize money Claim , and Defacement of Pr ize Bond ,

have been covered by us in our report. All the necessary information regarding prize bond

management has been presented in this report.

We are thankful to all those persons who provided us important information and gave us valuable

advices. We have tried our level best to complete this assignment meaningfully and correctly, as

much as possible.

We Hope that we have completed this report as per your satisfaction.

Sincerely yours,

Yasmeen

Faris



Dedication

We would like to dedicate this report to our Project Supervisor Sir Khalid

Mehmood and our internship coordinator Ma’am Neelofar Nazir who

encouraged us and gave their full attention in completing this report. This would

have never been possible without their valuable Support and time.



Acronyms:

SBP: State Bank of Pakistan.

BSC: Banking Services Corporation.

S.O: Senior Officer.

TO: Treasury Officer.

ATO: Assistant Treasury Officer.

SSC: Special Saving Certificates.

DSC: Defense Saving Certificates.

NIBAF: National Institute of Banking and Finance.

DCM: Deputy Chief Manager.

ACM: Assistant Chief Manager.

SWPB: Student Welfare Prize Bond.

DAU: Deposit Account Unit.

PAU: Public Account Unit.

IBP: Institute of Bankers Pakistan.

PBU: Prize Bonds Unit.



S. NO. Contents Page. No.

Acronyms: ..........................................................................................................................................................................................5

1. Executive Summary: ............................................................................................................................................................. 10

2. State Bank of Pakistan: ........................................................................................................................................................ 11

2.1 Central Board of Directors ................................................................................................................................................ 11

2.2 Functions of State Bank of Pakistan: ............................................................................................................................... 11

2.3 Traditional Functions: ........................................................................................................................................................ 12

Primary functions: ......................................................................................................................................................... 12

Secondary functions: ..................................................................................................................................................... 12

2.4 Non-Traditional Functions: ............................................................................................................................................... 12

3. Subsidiaries of State Bank of Pakistan: ............................................................................................................................ 12

3.1 BSC (Banking Services Corporation): ............................................................................................................................ 13

Vision:.............................................................................................................................................................................................. 13

Mission: ........................................................................................................................................................................................... 13

3.2 NIBAF (National Institute of banking and finance): .................................................................................................... 13

3.3 Functions ............................................................................................................................................................................... 14

3.4 Field offices: ......................................................................................................................................................................... 14

3.5 Functions of BSC: ............................................................................................................................................................... 14

3.6 Office Hierarchy: ............................................................................................................................................................ 15

3.7 Organogram of State Bank of Pakistan:......................................................................................................................... 16

3.8 Four Issue Offices: .............................................................................................................................................................. 17

4. Divisions of SBP Banking Services Corporation Quetta:.............................................................................................. 17

4.1 Banking Division: ............................................................................................................................................................ 17

4.2 Prize Bond Unit: .............................................................................................................................................................. 18

4.3 Deposit Account Unit (DAU): ...................................................................................................................................... 18

4.4 Public Account Unit (PAU):......................................................................................................................................... 19

4.5 Foreign Exchange Operations Unit (FEOU): ............................................................................................................ 19

4.6 Development Finance Support Unit (DFSU): ............................................................................................................ 19



4.6.1 Functions of DFSU ..................................................................................................................................................... 19

4.7 Administration Division: ................................................................................................................................................ 20

4.8 Staff Matter Unit: ............................................................................................................................................................ 21

4.9 General Services Unit: ................................................................................................................................................... 21

4.10 Employees Benefit Units: ............................................................................................................................................. 21

4.11 Medical Welfare Unit: .................................................................................................................................................. 21

4.12 System Support Unit: .................................................................................................................................................... 22

4.13 Issue and Treasury Cash Division: ............................................................................................................................ 22

4.14 Currency Management Unit:........................................................................................................................................ 22

4.15 Currency Accounts Unit: ............................................................................................................................................. 23

4.16 Claim Unit:..................................................................................................................................................................... 23

Issue Branch .............................................................................................................................................................. 24

Exchange Branches. ................................................................................................................................................. 24

4.17 BOX BALANCE: ................................................................................................................................................................ 24

4.18 COUNTERS: ................................................................................................................................................................... 25

5. National Prize Bonds: ........................................................................................................................................................... 27

5.1 Introduction:..................................................................................................................................................................... 27

5.2 Prize Bond Management:............................................................................................................................................... 28

5.3 Current Denominations: ................................................................................................................................................ 28

5.4 Detail of Prizes: ............................................................................................................................................................... 28

5.5 Outline of the scheme: .................................................................................................................................................... 29

5.6 Printing and supply of the National prize bonds: ...................................................................................................... 30

5. 7 Delivery of Prize bonds by PSPC:............................................................................................................................... 31

5.8 Offices o f issue:................................................................................................................................................................ 31

5.9 Sale of prize bonds: ......................................................................................................................................................... 31

5.10 Encashment of prize bonds:......................................................................................................................................... 32

5.11 Re-sale and Re-issuable Prize bonds: ....................................................................................................................... 33

5.12 Receipt and examination of prize bonds: .................................................................................................................. 34

5.13 Draw Dates: ................................................................................................................................................................... 34

5.14 Draw committee: ........................................................................................................................................................... 34

5.15 Draw Machine: ............................................................................................................................................................... 35



5.16 Denomination: ............................................................................................................................................................... 35

5.17 Denominations with Prize Money: ............................................................................................................................. 36

5.18 FORGERIES: ................................................................................................................................................................. 37

5.19 Open and shut period: .................................................................................................................................................. 37

5.20 Supervision and Control: ............................................................................................................................................. 37

5.21 Issuance of Prize Bonds: .............................................................................................................................................. 38

5.22 Procedure for Prize Money claim: ............................................................................................................................. 38

6 Security Features of Prize bond: ............................................................................................................................................ 38

6.1 Paper: ................................................................................................................................................................................ 38

6.2 Watermark: ....................................................................................................................................................................... 39

6.3 Letterpress: ....................................................................................................................................................................... 39

6.4 Rainbow Printing: ........................................................................................................................................................... 39

6.5 Optically variable inks (OVI): ........................................................................................................................................ 40

6.6 Infra Red Glowing: ........................................................................................................................................................... 40

6.7 UV Glowing: ...................................................................................................................................................................... 40

7 Security Features of Prize bond of Different Denominations: ......................................................................................... 41

7.1 Denomination of Rupees hundred: ............................................................................................................................... 41

7.2 Denomination of Rupees Two Hundred: ...................................................................................................................... 42

7.3 Denomination of Rupees Seven Hundred & Fifty:...................................................................................................... 43

7.4 Denomination of Rupees Fifteen Hundred: ................................................................................................................. 44

7.5 Denomination of Rupees Twenty Five Thousand: ...................................................................................................... 45

7.6 Denomination of Rupees Forty Thousand: .................................................................................................................. 46

8 How to Detect tampering/alteration in prize bond numbers ......................................................................................... 47

8.1 Alteration in Stamp and likely impact :........................................................................................................................ 48

8.2 Frauds and forgeries of National Prize Bonds: ......................................................................................................... 48

9. Securities: .......................................................................................................................................................................... 48

9.1 Special Savings Certificates (SSC): ................................................................................................................................ 48

9.2 Defense Saving Certificate (DSC) :.............................................................................................................................. 50

9.3 Investors: .......................................................................................................................................................................... 50

9.4 Purchasing Process: ......................................................................................................................................................... 50

9.5 Mode of Deposit:.............................................................................................................................................................. 51



9.6 Investment l imit: ............................................................................................................................................................. 51

9.7 Redemption:...................................................................................................................................................................... 51

9.8 Tax & Zakat Status:.......................................................................................................................................................... 51

10. SWOT Analysis of National Prize Bond Unit ............................................................................................................. 53

10.1 Strengths :....................................................................................................................................................................... 53

10.2 Weaknesses: ................................................................................................................................................................... 53

10.3 Opportunities :............................................................................................................................................................... 53

10.4 Threats : .......................................................................................................................................................................... 54

11. Conclusion........................................................................................................................................................................ 55

12. Recommandations ........................................................................................................................................................... 56

13. Référence List : ................................................................................................................................................................ 57



1. Executive Summary:

We have done our internship in SBP (BSC) Quetta and the Unit assigned to us is “National

Prize Bond Unit”. The main departments working are; Administration Division, Banking

Division, Treasury and Cash Division, Banking Division. The units visited by us are currency

management, currency accounts, claim units, AFU and complaint units, Export refinance unit and

IBP. System and Support unit, Medical and Pay & Allowances, Deposit account unit ( DAU),

Public account unit (PAU), Prize bond unit, and FEOU. As State Bank of Pakistan is a central

bank so it is a very good opportunity for students to get knowledge & knowhow about the

functions and departments of SBP (BSC) Quetta.

In this report we have firstly defined a short history of SBP BSC and its main functions. The

Different divisions along with their units have also been presented. The functions of different

units are also mentioned in this report. After that we have come towards our main topic i.e.

“Procedures of Prize bond Management in SBP BSC Quetta”. We have gone step by step and

have defined the whole procedure there. A brief introduction of National Prize Bond has been

defined and the different denominations, sale and encashment of Prize Bond and so on. The

different certificates dealt by SBP BSC are also discussed. Finally, we have come towards

conclusion and recommendations. In short, it was an amazing learning experience in SBP BSC.



2. State Bank of Pakistan:

State Bank of Pakistan is the Central Bank of the country. Before independence, the central Bank

of India was the central bank performing both for India and Pakistan. It was distributed by British

government on 30, December, 1948 by the ratio of 30% to Pakistan and 70% to India. In May,

Muhammad Ali Jinnah established the state Bank of Pakistan and it commenced its business on

July 1, 1948. The operations of State Bank were commenced on 24th September, 1952 in Quetta.

State Bank of Pakistan has its two subsidiaries which are NIBAF and SBP BSC. NIBAF is a

training institution whereas SBP BSC performs the operational functions. NIBAF was

established in 1997. Whereas, SBP Banking Services Corporation was established in January,

2002.

The current Governor of SBP is Mr. Ashraf Mehmood Wathra.

2.1 Central Board of Directors

Governor is the chair person.

Members of the board:

Secretary finance represents GOP

7 non executive directors as members of central board

Representation from each province and agriculture, banking, and industrial sector.

2.2 Functions of State Bank of Pakistan:

State Bank of Pakistan mainly performs the following two functions

Traditional functions

Non-traditional Functions



2.3 Traditional Functions:

The traditional functions are further divided in to primary functions and secondary functions.

Primary Functions:

Among Primary functions following are included i.e. Regulations and supervision of

financial system, issuance of notes, Bankers’ Bank, Lender of last resort, Banker to

Government, and conduct of monetary policy.

Secondary Functions:

Among the secondary functions we have Advising government on Policy matters,

Management of Foreign exchange, Managing public debt and relationship with other

financial institutions.

2.4 Non-Traditional Functions:

The nontraditional functions performed are islamization of banking system, providing

trainings to bankers, promotion of micro finance sector and also promoting small and

medium enterprises (SME’s), Export refinance and Promoting Agricultural Sector.

3. Subsidiaries of State Bank of Pakistan:

BSC ( Banking services corporation)

NIBAF ( National Institutions of banking & finance)



3.1 BSC (Banking Services Corporation):

BSC was established in January 2002, it is a hundred percent owned subsidiary of the State Bank

of Pakistan. This is ensured with the task of currency management, administrative and

operational oversight of foreign exchange departments, export and other finance, management of

government account and operational work related of government certificates.

Vision:

To develop SBP BSC into a dynamic and efficient organization equipped with requisite

technology and human resource capable of extending sustainable support to state bank of

Pakistan in achieving its objectives.

Mission:

To provide excellent banking and financial services to stake holders besides ensuring

implementation of SBP policies in order to command their trust and respect.

3.2 NIBAF (National Institute of Banking & Finance):

NIBAF is an educational and training institution which is playing an important role for the

SBP. It was established by SBP in 1997 which is conducting residential training programs in

Islamabad. It also serves as a training academy for commercial banks at national and

international level.



3.3 Functions

International courses

Certificate courses.

Training program courses Requisitions.

3.4 Field Offices:

There are sixteen field offices of SPB (BSC) throughout the country:

Karachi

Lahore

Islamabad

Peshawar

Quetta

Bahawalpur

Multan

Faisalabad

Daira Ismail Khan

Muzafarabad

Rawalpindi

Hyderabad

Sukkur

Gujranwala

Sialkot

N.Nazimabad Khi

3.5 Functions of BSC:

Managing currency efficiently

Customer oriented banking services

Managing government Payment System Effectively.

Implementing Policies of State Bank of Pakistan Successfully.



3.6 Office Hierarchy:

Chief Manager

DCM (Admin) Divisional Head

ACM (SM & EBU)

ACM (GS and

ENG.)

ACM (DFSU)

DCM (Banking) Divisional Head

ACM (PAU)

ACM (DAU &

PBU)

Prize Bond Unit

Currency Officer

Divisional Head

ACM (Currency mgmt. & Currency Account

ACM (Issue & Treasury

Cash )

ACM (Vaults)

ACM

( Audit)



3.7 Organogram of State Bank of Pakistan:

Corporated Managment Team

(CMT)

Office of the

Corporate Secretary

Stratagic Planning

Internal Audit & Coraplance

External Resistance

Governor

Depty Governor

( Banking )

Chief Economic Adviser

(PO)

Research

Economic Policy Review

Chief Economic Advisor

(MP)

Monetary Policy

Statistics & DMH

Libraty

Depty Governor

( Financial markets & islamic banking & Special institution )

Executive Director

(BPRG)

Banking Policy &

Regulations

Exchange Policy

Executive Director

( PMSRM )

International Markets &

Investments

Domestic markets & Monetory

mangement

Depty Governor

( O peration )

Executuve

Director

(PRM)

Fiance

Risk Managment cooplasce

Treasury Operations

Executive Director

(O perations)

Payment Systems

Information

Systems

& Teach

Meseum & Art Qstery

Legal Services

Execuive Director

Human Resoures

Human Resources



3.8 Four Issue Offices:

Karachi

Lahore

Peshawar

Quetta

4. Divisions of SBP Banking Services Corporation Quetta:

Banking Division

Administration Division

Issue and Treasury Cash Division

4.1 Banking Division:

Under the banking Division we have the following units mentioned in the Diagram;

Ba

nk

ing

Div

isio

n

Prize Bond unit

DAU

PAU



4.2 Prize Bond Unit:

The main function of Prize Bond Unit is the management of Public debt, sale and Encashment of

Prize Bond, conducting prize bond draws. Payment of Prize money is also the core responsibility

of Prize Bond Unit. Prize Bond is the scheme of national savings and SBP charges a commission

against that. National Prize is a bearer security and is a debt which government borrows from the

general public. This unit also deals in other saving certificates.

The denominations of National Prize Bonds available are as under;

• Rs.100/- Student Welfare Prize bonds.

• Rs.200/- National Prize Bonds.

• Rs.750/- National Prize Bonds.

• Rs.1, 500/- National Prize Bonds.





4.3 Deposit Account Unit (DAU):

This unit deals with maintaining current accounts of commercial banks and with the fulfillment if

their cash needs. It maintains only one account of one bank i.e. the accounts of the main branches

of different commercial banks are maintained here.



4.4 Public Account Unit (PAU):

In Public account unit the account of government is maintained which deals with payment and

receipts of Government. The sub units are PAD (payment) and PAD (Receipt). The following

accounts maintained here are Drawing account, Assignment Account and Personal Ledger

Account and there are three modes of payment i.e. cash, clearance and transfer.

4.5 Foreign Exchange Operations Unit (FEOU):

Foreign Exchange Operations Department (FEOD), SBP BSC provides operational support to

Exchange Policy Department of SBP the foreign currency operations of commercial banks

dealing in foreign exchange transactions are monitored by this department.

FEOD also deals with the matters relating to import and export payments and receipts. The

routine operations included processing of export overdue cases, issuing show cause notices to the

defaulting exporters with referring the cases to Foreign Exchange Adjudication Department

(FEAD), allowing private remittances on various accounts, managing payment due on account of

various incentive schemes of the government and handling monthly returns received from

Authorized Dealers.

4.6 Development Finance Support Unit (DFSU):

4.6.1 Functions of DFSU



The functions of DFSU unit are to encourage small and medium enterprises towards investment.

The main objective of this unit is to create awareness in public in order to improve the important

sectors of economy. It facilitates the small and medium enterprises and other small investors who

don’t have much knowledge about financing schemes available to them by conducting different

exhibition, fairs and Melas. The DFSU unit also conducts researches etc.

This department has four units which are;

Access to finance unit

Institute of banking Pakistan

Complaints

Export refinance

4.7 Administration Division:

The administration division has the following unit;

DFSU

Micro Finance

SME financing

Agricultural Fianance

Islamic Finance



4.8 Staff Matter Unit:

The Employees’ records are maintained in this unit. Employees Performance appraisal is

done by this unit by keeping records of employees i.e. keeping all the leave records, posting

orders and issuance of disciplinary notices.

4.9 General Services Unit:

The procurement of stationary items and dealing with fixed numbers of suppliers come under

this unit.

4.10 Employees Benefit Units:

This unit is responsible for maintaining the profile of retired employees and as well as active

employees for fund payment etc. The salary payment of all employees, their advances,

pension payment, retirement benefit funds and different allowances like educational

allowance, TA and DA allowance, different types of loans etc. are done by this unit.

Employees’ welfare trust is also run by this unit.

4.11 Medical Welfare Unit:

The medical welfare unit manages the medical facility given to employees and their spouse.



4.12 System Support Unit:

In 2005, SBP-BSC Quetta transformed their manual system to automation. LAN (Local Area

Network) is used in order to connect all the computer systems to the server and second is

WAN that connects all the field offices of SBP-BSC throughout the country.

4.13 Issue and Treasury Cash Division:

Issue division has the following units;

4.14 Currency Management Unit:

SBP follows the Clean Note Policy under which they are responsible to provide clean currency

notes to the public for their everyday transactions. It ensures the smooth operations of currency

and coins in every corner of the country. Currency Management is not an easy task. It is the duty

of this unit to oversee the currency circulation and provide currency needed to different chests

according to their holding capacity. We have 33 chests in Baluchistan and the areas in which

there are no chests the functions are performed by Treasury Office and Sub treasury Office.

There is only one sub treasury office in Baluchistan. Receiving indents from the chests and

treasury offices and sending currency are the functions of this unit.

Issu

e D

ivis

ion

Currency Management

Currency Accounts

Claim/Forged Notes



The indents for ATM by commercial banks are also sent to BSC and this unit also examines the

forged and soiled notes.

4.15 Currency Accounts Unit:

This unit is responsible for maintaining records and accounts. The following two accounts are

maintained in this unit i.e. Home Note Account and Value Account. Currency is the liability side

of balance sheet and Gold, Coins, Foreign Reserves and SDRs are the asset side.

Under the home note account the further sub accounts are currency accounts, Exchange

note accounts, currency chest account, circulation, invoices notes, cancelled notes

accounts and stock.

Under this account all asset held against the note in circulation are maintained and the

different assets are Coins, Foreign reserves, SDRs and Gold.

4.16 Claim Unit:

This unit is responsible for providing the exchange facility over the counter free of cost at all

field offices of SBP. If the note was found payable customers will be paid otherwise not.

Notes are divided as issuable and non-issuable notes. The same note would be rejected if not

found payable as per their rule; such notes will not be retained and are destroyed according to

their prescribed procedure. Notes which are torn into more than two pieces, washed, oily or

partly burnt provided missing portion of the note is less than half so that it is too small to be

used to substantiate another claim. Such notes require special examination under a specified

procedure.



There are two main branches of treasury cash division.

Issue Branch

The issue branch deals with the receipt, safe custody, and issue of fresh notes to the

exchange branch and currency chests. It also deals with the receipt and disposal of non

Issuable notes from the chests under the circle and the taking over from the exchange branch

of cancelled notes from the pending verification.

Exchange Branches.

The exchange branch deals with the exchange of notes and coin over the counters. It also

deals with the examination of remittances of non issuable notes, the receipt and examination

of inward coin remittances, the dispatch of remittances of fresh & issuable notes, coin and

small coin. The cancellation of notes received and examined in the office the exchange of

small coin & un-current coins and other transactions between the Banking and Issue

Departments. The office will be opened each day for public dealing and Treasury (Cash)

Division/ Unit staff should always be present at least half an hour in order to make everything

ready. Whereas, fresh bonds are supplied by HOK to issue branches and exchange branches.

4.17 BOX BALANCE:

Notes

National Prize Bonds

Coins



4.18 COUNTERS:

Following are the counters in the Treasury/cash division;

Exchange

Government Payments

Banking

Government receipts and heavy tender

National Prize Bonds (L.D SALE)

National Prize Bonds (H.D SALE)

National Prize Bonds (ENCASHMENT)

National Prize Bonds (PRIZE MONEY)

Pension Counter

Coin Counter

ACM (Cash) is the in charge of Treasury Cash Division. He works under the supervision of

Currency Officer. He is responsible for strict discipline & proper utilization of Staff of Treasury

Cash Division.



The Procedures of

Prize bond

Management in SBP

BSC Quetta



5. National Prize Bonds:

5.1 Introduction:

Prize Bonds are a form of Federal Government Security issued under Public Debt Act, 1944.It is

the largest National Savings Scheme regulated by the Central Directorate of National Savings.

Prize bond is a debt instrument and is a non interest bearing instrument and was first introduced

on 1st Oct., 1960 and detailed procedures are mentioned in circulars and are followed by the SBP.

State bank works as an agent on the behalf of government. The first denomination started by

Rs.10 and these Bonds were discontinued from 14-03-1987. The free encashment of prize bonds

were introduced after the popularity of this scheme among public in SBP and as well as in other

commercial banks. National price bond is a kind of an encouragement to people towards

investment and is controlled by central directorate, ministry of finance, National savings and

Govt. of Pakistan. The two Public Debt offices are in Karachi and Lahore.

Some of the older denominations of National Prize Bonds are,

Start Dates

Denominations

1st October 1960

Rs.10 denomination

24-06-1964.

Rs.5 denomination

01-07-1981.

of Rs.50, Rs.500 and Rs.1000 denomination

15-07-1987.

Rs.100 denomination

15-11-1995.

Rs.25, 000 denominations

15-12-1995.

Rs.10, 000 denominations



Subsequently other denominations were also introduced i.e. 50, 100, 500, 1000, 10,000,

25,000.With the start of new millennium, the sale of Rs.100, Rs.500, Rs.1,000, Rs.5,000,

Rs.10,000 & Rs.25,000 Prize Bonds were discontinued and New Millennium Prize Bonds of the

six denominations (200, 750, 1500, 7500, 15000, 40000) were launched.

5.2 Prize Bond Management:

The whole process of managing prize bonds from the printing till the dest ruction of the prize

bonds is called prize bond management.

5.3 Current Denominations:

Rs.100/- Student Welfare Prize bonds.

Rs.200/- National Prize Bonds.

Rs.750/- National Prize Bonds.

Rs.1, 500/- National Prize Bonds.





5.4 Detail of Prizes:

• Rs.100/- SWPB

• First Prize Rs.700,000/-(one prize in each series)

• Second Prize Rs.200,000/-(three Prizes in each series)



• Third Prize Rs.1000/- (1199 prizes in each series)

• Rs.200/- NPB

• First Prize Rs.750,000/-(one prize in each series)

• Second Prize Rs.250,000/-(five Prizes in each series)

• Third Prize Rs.1250/- (2394prizes in each series)

• Rs.750/- NPB

• First Prize Rs.1,500,000/-(one prize in each series)

• Second Prize Rs.500,000/-(three Prizes in each series)

• Third Prize Rs.9,300/- (1696 prizes in each series)

• Rs.1500/- NPB


• Second Prize Rs.1,000,000/-(three Prizes in each series)

• Third Prize Rs.18500/- (1696 prizes in each series)

• Rs.25,000/- NPB




• Rs.40,000/- NPB




5.5 Outline of the Scheme:

Bonds are called “National Prize Bond” and are issued by central government and it is a kind of

loan from public to government. The different denominations are issued in series the numbers of



which will be preceded by a single number and thereafter double Alphabets like A/1, A/2 and so

on then B/1, B2 and so on and contains six or seven digits.

The dates of draw are announced by chief directors, National savings, and government of

Pakistan, ministry of finance in the government gazette and newspapers. Chief Director and

national savings are responsible for sending 2000 copies of winning prize lists to all branches of

Bank and offices will further send 2 copies to treasury and sub treasury and commercial banks

will also display the list in their premises for public to get knowledge about list of winning prize.

But post offices will get list from chief directorate and national savings. The lists are also

mentioned on their websites.

5.6 Printing & Supply of the National Prize Bonds:

National Prize bonds are printed by “Pakistan security Printing Corporation” and will be

approved by central government in consolation with state bank of Pakistan and it is the sole duty

of PSPC to ensure that the ink and material they are using are not easily available in the market

in order to avoid forgery.

Prize bond are issued in order of six digits.

These numbers will be preceded by a signal and thereafter double alphabets etc alphabets i.e. (A,

B, C) etc AA, AB etc and such complete lot will be known as “Bonds of series”. The alphabets

alphabet (I) & (O) will not be printed on the bonds because in paper money the serial number

have no value but specially in price bond serial is much important that is way the I and O did not

count because it may cause confusion as it is similar to zero and one. Every seria l no contains 6

digits and the bonds after being printed are numbered will be made into packets of 100 pieces.

Each paper will be closed by “Paper Wrapper” and made into bundle of 10 packets, before

delivery to banks the bonds will be packed by the Pakistan security printed corporation into the

link are each cases having 50 bundles of 50,000 pieces of prize bonds.



5. 7 Delivery of Prize Bonds by PSPC:

The allocation is made on the basis of the results of past sales at the two public debt offices.

PSPC delivers the entire consignment to public debt office, Karachi. SBP BSC Quetta is

delivered prize bonds by PDO Karachi.

5.8 Offices of Issue:

All the offices of SBP BSC in different cities can issue bonds. Whereas, prize bonds will also be

available at other commercial banks, national saving institutions and post offices. The

commercial banks, saving institutions and post office will acquire bonds from BSC and will sale

bonds at their face value.

5.9 Sale of Prize Bonds:

Public can purchase bonds against cash without going through any formal application procedure.

It a bearer instrument that’s why name of the buyer or purchaser etc. would not be written on it

but name of the office of SBP selling the bond and the date they are selling would be mentioned

on the bond by the particular office The bonds are issued in series and before issuing new fresh

series permission must be gotten from CMD. IT is the duty of the office to check out the stock in

order not to get out of the Stock. If they get out of stock then they must fix any other date for

public when bonds will be available or they can also ask public to acquire bonds from

commercial banks. At the office of SBP BSC (bank) the sale of prize bonds (fresh and re-

issuable) conducted over the counter of cash department. Commercial banks and National Saving

centers will send their indent to SBP BSc and will pay check against that which will be debited in

their account.



The bonds which are sold from the series will be awarded in the draw and the in the event of

unsold bond or bonds which are sold after the closing date winning any prize, will not be

awarded in the draw.

5.10 Encashment of Prize Bonds:

The encashment of prize bond is very easy. The holder can present it any time in SBP BSC

commercial banks or other post offices and receive the face value against that. It can be encashed

irrespective of the fact from where it was issued. The bonds are bearer instrument and are re

issuable also. It can be encashed at any time from the counters of the cash department if it is;

Genuine

Bonds bear the date of issue and name of the place from where it was issued

Series and numbers are intact

The bonds are free from mutilation .Slightly mutilated and soiled bonds may also be

accepted at the cash counters.

The Cash Department will prepare statement of Encashment in Globus Version PB-12 showing

particulars of the Bonds enchased during the day. This statement will be in two parts – one will

pertain to Re-issuable bonds under which the Series-wise total pieces and value of the Re-

issuable Bonds encashed will be recorded. The other part will be in respect of Defaced bonds. In

this part of the statement (for Defaced Bonds) full details of the Bonds such as Series-wise serial

number, the date and place of issue, number of pieces and value will be recorded. These

statements will be sent to the ACM-in-charge, prize bonds Section for debiting the Government

Account – central under the head Government Account – Central-I. The debit voucher will be

prepared by the Cash Department. The voucher will be for the total money paid out in encashing

Prize Bonds (Both Re-issuable and Defaced). The total pieces of Re-issuable and Defaced Bonds



must be indicated in the body of the voucher. This voucher duly initialed by the TO/ATO will be

forwarded to the Prize Bonds Section along with the statement in Form PB-12 for the signature

of the AO and ACM of the Prize Bonds Section.

Similarly, bonds which are held by the public and commercial banks for a period of one month or

more from the date of their issue if encashed at the state bank of Pakistan or post office before

the announcement of the results of prize draws in the gazette notification will not be awarded

prizes even though they may win prizes.

The facility of encashment of prize bonds to the public will, however, continue unrestricted.

Encashment should not be denied even on the date of draw of prizes.

5.11 Re-Sale & Re-Issuable Prize Bonds:

The sale of Re-issuable Prize Bonds of Rs.100/-, Rs.200/- Rs.750/- and Rs.1500/- denomination

at the offices of SBP BSC will be suspended after the close of business as on 14th of the month

immediately preceding the month of draw and that of Rs.7500/-, Rs.15000/- Rs.25000/-, and

Rs.40000/- denomination prize bonds after close of business on last working day of the month

immediately preceding two months of draw and resumed after verification of the Re-issuable

Bonds in stock with the Prize Winning Numbers from the Official Gazette. Bonds encashed after

the date of Draw will, however, not be subjected to verification for prize money and the same

will be put on re-sale without waiting for the receipt of the Official Gazette.

The Re- issuable and Defaced Prize Bonds which are in the custody of the State Bank of Pakistan,

SBP BSC (Bank) will be eligible to participate in the Prize Draw, and some of these bonds will

win the prizes. The prize money won by these Bonds will be paid to the Government. The sale of

re-issuable prize bonds is not liable to win the prize during shut period i.e. two months before the

draw of prizes. During this period of suspension all bonds (including defective and defaced) are

entered in Form PB-35 version in Globus.



5.12 Receipt & Examination of Prize Bonds:

The prize bonds will be received by the accounts officer- in charge- and the representative of the

accountant (cash)/treasurer at each public debt office viz, Karachi and Lahore. They will be taken

delivery of from the press representation in the same manner in which the bank notes are taken

delivery of. As is the case with note, immediately on receipt, the boxes of the prize bonds will be

entered in a register (form PB-3). After the prize bonds have been subjected to cent percent

examination in the presence of the press representation they will be take into stock accounts in

the stock register of fresh prize bond (form PB-4) and put into receptacles i.e. steel bins. Each bin

will have a pass book in form no. I-4(issue department manual) where in deposits and

withdrawals of prize bonds will be recorded. For the sake of convenience, each receptacle will

have 11 attached to it indicating the series and serial number of bonds kept therein.

5.13 Draw Dates:

The dates for draw are announced by chief director national savings, government of Pakistan,

ministry of Finance in newspapers etc. The draw will be held only in working days, if any the

dates are to be a holiday then the draw will be conducted on the next working day. The mere

delivery of prize bond will transfer the ownership. Draws are conducted according to the

prescribed procedure. Draws are conducted quarterly i.e. total four draws in each calendar year.

5.14 Draw Committee:

The draw at each center will be held under the supervision of the government of Pakistan and

will be managed by a committee as follow:



Chairman: An officer of the government e.g. Lawyers, educationists etc.

Secretary: An officer of the SBP BSC Quetta e.g. deputy chief manger

NS: Two officer from national savings in which one is from Audit department.

Members: One member from SBP BSC (Bank), and two non- official members from

Chamber of Commerce & Industry.

5.15 Draw Machine:

Prize bond draw is held by a committee constituted by Central Directorate of National Savings

(CDNS) and open to general public. Winning prize bonds are drawn through Hand operated draw

machine, which is operated by special children in front of Committee members and general

Public attending the draw Ceremony. Draw machine is also checked by general public before the

start of draw.

5.16 Denomination:

Serial #

Denominations (Rs)

Draw Period

1

100

15th February, May, August & November per year.

2

200

15th March, June, September & December per year.

3

750

15th January, April, July & October per year.

4

1,500

15th February, May, August & November per year.

5

7,500

1st February, May, August & November per year.

6

15,000

1st January, April, July & October per year.

7

25,000

1st February, May, August & November per year.

8

40,000

15th March, June, September & December per year.



5.17 Denominations with Prize Money:

Denomination

(Rs)

1st Prize

2nd Prize

3rd Prize

# Amount

(RS.)

# Amount

(RS.)

# Amount

(RS.) 100

1

700,000

3

200,000

1,119

1,000

200

1

750,000

3

250,000

2,394

1,250

750

1

1,500,000

3

500,000

1,696

9,300

1,500

1

3000,000

3

1000,000

1,696

18,500

7500

1

15,000,000

3

5,000,000

1,696

93,000

15000

1

30,000,000

3

10,000,000

1,696

185,000

25000

1

50,000,000

3

15,000,000

1,696

312,000

40000

1

75,000,000

3

25,000,000

1,696

500,000



5.18 FORGERIES:

Number tampering

Issue stamp tampering

Place of issue

Date of issue

Counterfeit Bonds

Claim/clearly payable bonds tempering.

5.19 Open & 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.

5.20 Supervision & Control:

The supervision and control are in the hands of the following;

Government of Pakistan, Ministry of Finance (National Savings Directorate) and

State Bank of Pakistan BSC Head Office.

Currency Management Department, SBP BSC Head office Karachi.

Public Debt office Karachi and Lahore.



5.21 Issuance of Prize Bonds:

Mainly by 16 field offices of SBP BSC across the country.

Sale and purchase also by National Savings centers and all commercial banks.

Prize money up to Rs.1250/- can be received from National Savings centers.

Open sale period for one month preceding the draw.

Four draws in each calendar year.

Draws at various centers of SBP BSC field offices.

5.22 Procedure for Prize Money Claim:

The claimant must present the original prize bond and its copy with a valid copy of CNIC. A

form PB-23 must be filled by the claimant and the personal appearance of claimant is

mandatory. The prize money up to PRs. 18500 will be paid in the same day through one

Window operation from the cash counters. Whereas, if the claimant is claiming prize money

above PRs. 18500 then he will be paid after full verification from PDOs/PSPC after 10 to 20

days. An income tax of 15% is deducted on prize money which is further credited to FBR’s

Account.

6 Security Features of Prize Bond:

6.1 Paper:

Security paper is made from cotton pulp

Paper is held under ultra violet light it is dull compared to other papers.



6.2 Watermark

Security threads:

6.3 Letterpress:

6.4 Rainbow Printing:



6.5 Optically Variable Inks (OVI):

6.6 Infra Red Glowing:

6.7 UV Glowing:



7 Security Features of Prize Bond of Different Denominations:

7.1 Denomination of Rupees Hundred:

1. SIZE

Cut size 184 X 95 mm.

2. PAPER.

Furnish.

100% Cotton Rag, 95 GSM, all rag watermark paper bearing words "Government of

Pakistan“.



Watermark. Scattered lettering Govt. of Pakistan.

3. COLOUR.

Border:

Pink on sides, Brown in center.

4. TINT.

Rainbow colors, Brown and Green.

7.2 Denomination of Rupees Two Hundred:

1. SIZE


2. PAPER.

Furnish.

100% Cotton Rag, 95 GSM, all rag watermark paper bearing words "Government of

Pakistan“.



Watermark. Scattered lettering Govt. of Pakistan.

3. COLOUR.

Border:

Mauve color on sides and Blue in center of the border.

4. TINT.

Rainbow colors, Blue and Red.

7.3 Denomination of Rupees Seven Hundred & Fifty:

1. SIZE


2. PAPER.

Furnish. 100% Cotton Rag, 95 GSM, all rag watermark paper bearing words

"Government of Pakistan“



Watermark. 3 dimensional Quaid-e-Azam Portrait.

Security Thread.1.0 mm Micro printed text thread bearing words “State Bank of

Pakistan”.

Security Fibers. Invisible fluorescent fibers scattered all over the paper

Penetrating Ink sifts color to green under UV shows in red penetrating ink from reverse.

3. COLOUR.

Border:

Green on sides, red in center

4. TINT.

Rainbow colors, Orange and Green

7.4 Denomination of Rupees Fifteen Hundred:

1. SIZE




2. PAPER.

Furnish. 100% Cotton Rag, 95 GSM, cylinder-mould watermark paper

Watermark. 3 dimensional Government of Pakistan. Coat of Arms Watermark appears

at the left side of the Bond

Security Thread.1.2 mm Silver text thread bearing words “Government of Pakistan”

Security Hi- lites. Are very small particles of fluorescent pigments, which are

incorporated in the paper as an integral part of the making process.

3. COLOUR.

Border:

Blue on sides, green in centre

4. TINT.

Rainbow colors, Pink and Green.

7.5 Denomination of Rupees Twenty Five Thousand:



1. SIZE


2. PAPER.

Furnish. 100% Cotton Rag, 95 GSM, cylinder-mould watermark paper

Watermark. 3 dimensional Coat of Arms

Security Thread.1.0 mm Silver text thread bearing words “Government of Pakistan”

Security Fibers. Invisible fluorescent pigments scattered all over the paper

Rosette in OVI

Penetrating Ink sifts color to green under UV shows in red penetrating ink from reverse.

3. COLOUR.

Border:

Multi Color Green on sides, maroon in centre

4. TINT.

Rainbow colors, yellow and maroon.

7.6 Denomination of Rupees Forty Thousand:



1. SIZE

Cut size 184 X 95 mm

2. PAPER.

Furnish. 100% Cotton Rag, 95 GSM, cylinder-mould watermark paper.

Watermark. 3 dimensional Government of Pakistan. Coat of Arms Watermark appears

at the left side of the Bond.

Security Thread.1.2 mm Silver text thread bearing words “Government of Pakistan”.

Security Hi- lites are very small particles of fluorescent pigments, which are

incorporated in the paper as an integral part of the making process.

Rosette in OVI.

3. COLOUR.

Border:

Brown and yellow

4. TINT.

Rainbow colors, orange on sides and violet in centre

8 How to Detect Tampering/Alteration in Prize Bond Numbers :

Tempering usually carried out in the bond numbers and issue stamp. Tempering in bond numbers

can be detected as:-

While entering the bond number into the system to know the outstanding status in PB-18.

Magnifying glasses

Under UV/IR lamp

Through local expert



Finally forwarded to PSPC, if cannot be detected from above

8.1 Alteration in Stamp & likely Iimpact :

In case of alteration in stamp, the bond will be sent to FIA laboratory in Islamabad.

They charges fee of Rs.500/- per case for their report. If the bond found tempered, the same is to

be retained for the period of Seven years for disposal/destruction there of.

8.2 Frauds & Forgeries of National Prize Bonds:

In case of frauds and forgeries of prize bond the same procedure of forgeries of currency would

be adopted. The case would be forwarded to police department and a proper record is maintained.

9. Securities:

BSC also manages the sale, encashment and profit payment of Special Savings & Defense

Savings Certificates Schemes of the government on behalf of Central Directorate of National

Savings (CDNS) under an agency arrangement with the federal government.

9.1 Special Savings Certificates (SSC):

State Bank of Pakistan deals with a small volume of business of special saving certificates. The

scheme of Special Savings Certificates (SSCs) is tailored to the needs of middle and lower



income group, household and small investors guaranteed by the government a periodic return.

However, big investors also tend to deposit heavy amounts in this scheme to earn a handsome

periodic return on their investments.

This Scheme being of three years maturity was introduced in February, 1990 keeping in view the

periodic needs of depositors. These certificates are available in the denomination of Rs.500/-,

1,000/-, 5,000/-, 10,000/-, 50,000/-, 100,000/-, 500,000/- andRs.1, 000,000/-. Profit is paid on the

completion of each period of Six months. In case, the profit earned on these certificates is not

drawn on due date, the undrawn profit will automatically stand reinvested from date of its

accrual. Interest rates of SSC change time to time to reduce the impact of inflation on General

Public so for that Profit payable on Special Saving Certificates (Regd.) Finance Division, Govt.

Of Pakistan; according to the Notification No.F.20 (4) GS-I/200/-8-1204 dated 0.06.200/-9 has

reviewed the rate of return on Special Savings Certificate (Regd.). The return on Special Saving

Certificates (Regd.) has been fixed as given in table below, for the certificates issued with effect

from01.07.200/-9. However, the Special Savings Certificates (Regd.) purchased prior to the said

Notification can earn profit at the rate prevailing on the date of purchase. When party wants to

get profit then party does not need to en-cash the certificates like in DSC. SSC and DSC

Certificates are reinvested if party doesn’t present the certificates at the time of maturity at the

rate of that time.

At prevailing rates, the profit is paid @ 9.70% p.a. for 1st five profits and @ 10.30% p.a. for the

last profit. However, if the profit is not withdrawn on due date it will automatically stand

reinvested and would be calculated for further profit on completion of the next 06 months'

period.



9.2 Defense Saving Certificate (DSC) :

The government of Pakistan introduced defense saving scheme in 1966. DSC’s maturity is about

10 years and profit is returned after one year. It is available in the following denominations; 500/-

, 1000/-, 5000/-, 50,000/-, 1, 000,000/-.Withholding tax of 10% is charged on denominations

above 100,000/-

9.3 Investors:

These certificates can be purchased by a single adult, a minor, two adults in their joint names

with the options of payable to the holders jointly (Joint-A ) or payable to either (Joint-B). An

adult can also purchase these certificates on behalf of a single minor, two minors jointly or

himself/herself and a minor jointly. Institutions may also invest individual funds such as pension,

gratuity, superannuation, contributory provident funds and trusts etc.

9.4 Purchasing Process:

These certificates can be purchased from any National Savings Centre (NSC),

Pakistan Post Office (PPO), Authorized branches of Scheduled Banks branches 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. A copy of the Computerized National Identity Card

(CNIC) or in case of a foreign national, a copy of the Passport is required to be attached with the

application form.

http://www.savings.gov.pk/Forms/SC-1.PDF



9.5 Mode of Deposit:

These certificates can be purchased by depositing cash at the issuing office or by presenting a

cheque. The certificates shall immediately be issued on receipt of cash. However, in case of

deposit through cheque the certificates shall be issued from the date of realization of the cheque

after receipt of the clearance advice.

9.6 Investment Limit:

The minimum investment limit is Rs.500/-, however, there is no maximum limit of investment in

the scheme.

9.7 Redemption:

These certificates are 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 and one year for the

respective certificates.

Further, certificates purchased on or after 15-11-2010 cannot be automatically reinvested.

However, other better options are available for investment in National Savings Schemes.

9.8 Tax & Zakat Status:

At present, the profit earned is exempt from withholding tax, if the total investment in the scheme

by the investor(s) does not exceed Rs.150, 000/-. However, withholding tax @ 10% is deductible



at source on the profit(s) earned if the total investment exceeds Rs.150, 000/- by the investor(s).

Zakat is collected at source as per rules. To facilitate the General Public in providing facility to

purchase/ encashment of SSCs/ DSCs near to their vicinities, seven more Scheduled Banks

named M/s Habib Metropolitan Bank Limited, Arif Habib Bank Limited, Bank of Tokyo-

Mitsubishi UFJ Ltd., Standard Chartered Bank (Pakistan) Limited, JS Bank Limited, HSBC Bank

Middle East Limited and Barclays Bank PLC, Pakistan have been authorized by CDNS to deal

with the National Savings instruments i.e.Defence Savings Certificates and Special Saving

Certificates through their branch network in Pakistan.



10. SWOT Analysis of National Prize Bond Unit

10.1 Strengths :

Fair draws held at SBP BSC and

participation of general Public.

Full interest and trust of the customers

about fair Procedure of prize money and

the draw.

Trained and qualified HR base.

Cases processed with in time.

Rules and regulations.

No fraud involve.

10.2 Weaknesses:

Lack of awareness about security features of Prize Bonds to layman.

Due to non availability of police escort, the prize bonds are sent through private security

agencies which increase the cost.

Less security features in small denominations of prize bonds.

10.3 Opportunities :

Training programs about new technology should be conducted

According to the interest of the public in prize bonds scheme government must

introduced some new denominations e.g. Rs.1000/-



Increase in number of prizes attracts general public.

The Globus system if updated, the efficiency can be increased.

More Markets especially of rural areas where this scheme is not available can be

captured.

10.4 Threats :

Selling of Prize Bonds through commercial banks motivate people to buy through them,

which is a loss of commission as well as tax evasion.

Availability of Forge prize bonds in the market.

Number tempering and stamp removal is easy to be done.

Numbers games in informal market- cuts off actual sale/purchase.



11. Conclusion :

The internship done by us in SBP BSC was an amazing experience. We can now say that we

have got much information about SBP BSC and mainly about P irze bond unit. We have almost

visited all the units and have gotten knowledge about their functions and management. The main

unit assigned to us was Prize Bond Unit in which we came to know about the payment procedure,

sale and encashment of Prize Bonds, Printing of prize bonds and security features of Prize

bonds.We have also mentioned the different denominations of prize bonds available and the

procedure for prize money claim. In short, the whole procedures of prize bond management have

been defined in this report.

Prize Bond is the scheme of government introduced for the betterment of the economy. It is an

attractive saving opportunity for the general public. Being a bearer instrument it has gained much

popularity. Prize bond is available at all issue offices plus commercial banks and post offices can

also sell it.

So our report covers the whole departments of SBP BSC, their functioning and units etc. But a

complete detail on Prize Bond unit has been described by us in this report. The unit is very

interesting and the whole procedure is very fair and transparent. The SWOT analysis of SBP

BSC has also been analyzed by us. At the end we have given some recommendations which can

be considered by SBP BSC.



12. Recommandations :

Awareness must be created among the general public about prize bond and detailed

procedure.

The brochures must be printed in the local languages for the layman and general public so

that it may become easy for people to understand.

More employees should be hired in order to increase the efficiency of departments.

The SBP can also maintain accounts of individual that is how the employees in SBP will

also be able to learn the procedures of commercial banks.

The I.T system and software support should be updated for the employees so that they

may be able to work with their full potential and talent.

As there are currently eight denominations of prize bonds so more denominations can be

introduced for customers’ ease and attraction.

The payment time period which are 10, 20 days etc. must be reduced for the purpose of

attracting more and more customers and early payment of the prize money claimed.

The co-ordination between National Savings and SBP should be enhanced and the burden

should be lessen from SBP. NS should also share the burden.

Employees should be trained more frequently to enhance their efficiency.



13. Référence List :

https://www.google.com.pk/webhp?sourceid=chrome- instant&ion=1&espv=2&ie=UTF-

8#q=functions%20of%20claim%20unit%20in%20sbp%20bsc

http://www.slideshare.net/Alishah28/report-on-state-bank-of-pakistan

http://www.sbp.org.pk/

https://www.google.com.pk/webhp?sourceid=chrome-instant&ion=1&espv=2&ie=UTF-8#q=functions%20of%20claim%20unit%20in%20sbp%20bsc

https://www.google.com.pk/webhp?sourceid=chrome-instant&ion=1&espv=2&ie=UTF-8#q=functions%20of%20claim%20unit%20in%20sbp%20bsc

http://www.slideshare.net/Alishah28/report-on-state-bank-of-pakistan

Date post:	15-Jul-2015
Category:	Education
Upload:	yasmeen-ali
View:	494 times
Download:	11 times

internship report on the Procedure Of prize bond management in SBP(BSC) Quetta..

Education