KARACHI: The federal government has documented Rs60 billion worth of bearer bonds valuing Rs25,000 each in three months to comply with one of the conditions of the Financial Action Task Force (FATF). The documentation of bearer bonds was one of the requirements to comply with the FATF conditions, for which the government started with first withdrawing Rs40,000 bearer bonds in June 2019. Pakistan remains on the FATF grey list and the next review of the task force is scheduled for June 2021. The finance ministry on December 9, 2020 announced it would stop issuing Rs25,000 denomination bearer prize bonds and further instructed the bonds could not be cashed or redeemed after May 31, 2021. Since the announcement, the outstanding stock of this bearer bond reduced to Rs41 billion by end of February 2021 as compared with Rs101 billion in December 2020, according to statistics released by the State Bank of Pakistan (SBP) on Thursday. The finance ministry strictly prohibited the replacement of the prize bond against cash. However, the SBP on December 10, 2020 issued procedure for designated banks to exchange the instruments. According to the procedure, the bonds can be converted to Rs25000 denomination premium prize bonds (registered) through SBP Banking Service Corporation and branches of six authorised commercial banks, including National Bank of Pakistan, Habib Bank Limited, United Bank Limited, MCB Bank Limited, Allied Bank Limited and Bank Alfalah Limited. Other options available to convert the bonds included: replacement of bearer bonds with special saving certificates or defence saving certificates; and transferring the proceeds to the bonds holder’s bank account through SBP BSC, authorised commercial bank branches and saving accounts at National Saving Centers. In order to comply with the FATF conditions, last October the government issued National Savings (AML and CFT) Regulations, 2020. Under these regulations the government has shown determination to document all type of debt instruments. One of the major requirements under these regulations that persons investing in saving schemes/prize bonds (registered) are required to provide source of income. Prior to seizing the circulation of Rs25,000 denomination bearer prize bonds, the government on June 24, 2019 also withdrew Rs40,000 denomination national prize bonds from circulation. The stock of bearer bonds has been reduced to Rs1.7 billion from Rs256 billion in June 2019. Following the withdrawal of bearer bonds, the investment into premium prize bonds (registered) increased to Rs29.1 billion by end of February 2021. The investment in Rs40,000 denomination premium prize bonds has increased to Rs22.96 billion. Meanwhile, Rs6.14 billion has been invested in premium prize bonds of Rs25,000 denomination since December 2020.