Prize bonds being used to whiten money

ISLAMABAD – The unauthorised business of prize bonds is emerging as an illegal market in Pakistan and is also being used as a tool for whitening money. According to a report prepared by the Central Directorate of National Savings (CDNS), after the draw, so-called dealers collect winning bonds from the public for nominal service charges in case of small prizes and even on some premium in case of big prizes and pay them the prize money instantly. These winning bonds are then offered to the people who intend to whiten their black money, again on some premium. The claims of winning prize bonds are filed with State Bank of Pakistan from those intending money laundering.
Prize bond dealers work as frontmen of big players. In most of cases, they provide one-window facility to their clients. A client has just to tell them his demand (amount to be whitened) and provide them with his CNIC. Rest of the course, from arrangement of the winning bonds to the final claim and payment of the prize money, is to be completed by these dealers. The report further says unscrupulous people also sell the numbers of prize bonds to people with an attraction that if their number comes in the draw, they will be entitled to the prize equal or double to the prize amount. The people are investing a huge amount in this nefarious business of purchasing the numbers of prize bonds.
Since this is not a documented business, it is causing loss to the state exchequer in the shape of evasion of taxes. As the dealers are selling serial numbers of prize bonds without actually purchasing them, their activities are causing loss to the economy. According to the report, the illegal market can easily be divided into different categories on the basis of the activities being carried out. In one case, the prize bonds for which the sale period is over are sold or purchased on premium. So-called prize bond dealers purchase a large number of prize bonds when their sale is open. They also purchase these bonds on some premium from the people who intend to get them encashed for their needs.
These bonds are then offered for sale few days before the relevant draw at the prices higher than their face value. Parchi Juwa is a gambling market where people try their luck either to become millionaire overnight or to empty their pockets. The minimum price of a parchi (slip) is Rs 10 while the maximum price is Rs 10,000. These parchi dealers just use the goodwill and the name of national prize bonds. The 14th and the last day of every month (the day prior to the prize bond draw, usually known as Chand Raat among the fellows), are the best days for these traders as business on these days reaches its peak.