mechanism of prize bonds has been changed . what do you think who has the authority to change this mechanism and what the reason to change this

2. S U B M I T T E D T O :
M A M S I D R A G M
S U B M I T T E D B Y :
G R O U P # 2
P R E S E N T A T I O N T O P I C :
M E C H A N I S M O F B O N D S
Introduction to Banking
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3. Group Members
 Hussnain Ali (2019-ag-6861)
 Waqas Aslam (2019-ag-6831)
 Raheel Ahmed (2019-ag-6855)
 Ateeq ur Rehman (2019-ag-6851)
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4. TABLE OF CONTENTS
SR# Contents
1 Introduction to bonds
2 What is a government bond
3 Why Mechanism of prize bonds change
4 Printing and issuance of Bond
5 Current Mechanism of Bond
6 Role of bonds in Economic boost
7 Conclusion
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5. INTRODUCTION TO BOND
 BOND:
A bond is a debt instrument issued by governments, corporation
and other entities for raise funds.
- A bond is a written and signed
- Promise to pay certain sum of Money on a certain date.
- A bond is a (written and signed promise) debt investment in which
an investor loans money to an entity (typically corporate or
governmental) which borrows the funds for a defined period of time
at a variable or fixed interest rate (coupon Rate).
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6. What is a government bond?
 A government bond is a debt security issued by a government to
support government spending and obligations.
 Government bonds can pay periodic interest payments called
coupon payments
 Government bonds issued by national governments are often
considered low-risk investments since the issuing government backs
them.
 Government bonds may also be known as Sovereign debt.
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7. Key Takeaways
 A government bond represents debt that is issued by a government and
sold to investors to support government spending.
 Some government bonds may pay periodic interest payments. Other
government bonds do not pay coupons and are sold at a discount
instead.
 Government bonds are considered low-risk investments since the
government backs them.

8. MECHANISM OF PRIZE BONDS
 Govt. stops sale of National Prize Bonds of Rs25,000
 This is the second time that the government has stopped the sale of a
bond within a year.
 Last year in December, the federal government discontinued the sale
of Rs25,000 National Prize Bonds, according to a notification issued
by the Finance Division.
 It was reportedly done to address the Financial Action Task
Force’s concerns over money laundering and terror
financing.

9. Printing and issuance of Bond
 Printing of Bond:
Bonds are printed in PSPC.
Pakistan Security Printing Corporation (PSPC) is a government organization that prints currency
notes and
government securities.
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10. Printing and issuance of Bond
 Security features:
These bonds are printed in the offset process on
SPL made paper & would carry the following security features:
- In paper:
(i) Enlarge watermark,
(ii) micro-printed security thread
(iii) Invisible coloured fibre.
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11. (i) micro-printed tint in rainbow colour,
(ii) guilloche patter,
(iii) visible fluorescent rosette,
(iv) invisible denomination print,
(v) numbering in red fluorescent ink.
In printing:

12. Printing and issuance of Bond
 Issuing procedure:
*Issued to the investor
provides information such as the
 Name of the company issuing bonds.
 Face value, maturity date and contractual interest rate.
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13. Current Mechanism of Bond
Mechanism:
Prize bond draw is held by a committee constituted by Central
Directorate of National Savings and open to general public.
Winning prize bonds are drawn through
Hand operated draw machine, which is usually operated by special
children in front of Committee members and general public attending
the draw ceremony.
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14. Current mechanism of Bond
 Mechanism:
Mechanism constructed in view of rate of return.
Simply government officials and state bank decide about the rate of return and then the
mechanism of prize bond is constructed.
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15. Role of bonds in Economic boost
 BOND:
Bond is simply a part of government securities. Through
bonds economic boost occurs.
Which is used by the government to raise funds. It has a great role in our
economic growth.
Through government securities and monetary policy banks control the
inflation and deflation attacks.
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16. Role of bonds in Economic boost
 How inflation occurs?
 Inflation is a measure of the rate of rising prices of goods and
services in an economy. Inflation can occur when prices rise
due to increases in production costs, such as raw materials and
wages. A surge in demand for products and services can
cause inflation as consumers are willing to pay more for the
product
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17. Role of bonds in Economic boost
 Measures taken by Bonds to control inflation:
Inflation is simply controlled by the central bank means the state bank of
Pakistan.
Bank use Government securities (bonds) to reduce inflation.
State bank sells government securities, increase reserve ratio and
increase interest rate.
So the public Aggregate demand decreased and inflation level goes
down.
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18. Role of bonds in Economic boost
 How deflation occurs?
Deflation can be caused by a combination of different factors, including having a
shortage of money in circulation, which increases the value of that money.
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19.  Measures taken by Bonds to control deflation:
Deflation is simply
controlled by the central bank means the state bank of Pakistan.
Bank use Government securities (bonds) to reduce Deflation.
State bank purchases government securities, reduce reserve ratio and
reduce interest rate.
So the public Aggregate demand increased and deflation level goes
down.
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20.  Will economic growth occurs through amendment's taken by
authorities?
 Yes, definitely if the state bank use a wise monetary policy and have a
wise control over the inflation and deflation . Then, the economic
growth occurs.

21. Conclusion
 Bonds are the major part of government securities. Which
are used by the central bank to adopt monetary policy.
Through this policy state bank reduce the inflation and
control the deflation rate.
 So, the economic growth occurs.
 When our national income rise and inflation is in control
then we have the economic growth position.
 So, bonds are simple instruments used by the state bank to
keep the economy of the country stable.
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