The Public Debt Management Office (PDMO) is preparing to increase the issuance of government savings bonds sold digitally, potentially reaching 10 billion baht if there is adequate demand.
The first batch of the Rao Chana (We Win) government savings bonds, worth 5 billion baht, sold out within eight hours on Krungthai Bank’s Pao Tang e-wallet app on Feb 1, said Patricia Mongkhonvanit, director-general of PDMO.
There were 9,549 buyers of the We Win government savings bonds via the Pao Tang app, with 67% from the provinces and the rest from Bangkok, according to PDMO.
The average purchase amount was 520,000 baht per person.
The Pao Tang e-wallet app also offers a feature to sell purchased government savings bonds, allowing bondholders who are in need of financial liquidity to sell their bonds and receive cash swiftly.
This is different from the past when bondholders had to hold on to purchased government savings bonds until the maturity date.
“An e-wallet makes converting [bond sales] to cash quick and easy without any fee. In the past, savings bonds had to be sold through dealership financial institutions and banks accepted these transactions at a discounted rate. But selling via the e-wallet app allows sellers to sell at the market price, while buyers can purchase through secondary markets,” she said.
PDMO is considering raising the issuance size of the next edition of government savings bonds sold via the Pao Tang e-wallet app, said Mrs Patricia.
The issuance amount could be up to 10 billion baht, but the sum would initially be capped at 7 billion before a gradual increase in issuance value takes place, she said.
PDMO is also discussing with the Revenue Department the withholding tax system for interest received from government savings bond investment.
The objective is to enable bondholders to claim tax refunds through the e-wallet app to compensate for the period that they no longer hold savings bonds.
This means the withholding tax applied for selling bonds will be taxed in accordance to the actual bond-holding period.
SOURCE: Bangkok Post