Pakistan May Abandon Rs 5000 Banknotes

[Bimat]

SBP faces calls of abandoning Rs5,000 banknotes

By Shahbaz Rana
Published: August 28, 2015

ISLAMABAD:  The central bank has been approached by certain quarters to discontinue the Rs5,000 denomination currency notes, said State Bank of Pakistan (SBP) Deputy Governor Saeed Ahmad on Thursday.

"Globally, all countries prefer coins over notes due to their longevity and least chances of forgery," he said while speaking at a meeting of the Public Accounts Committee (PAC).

"Due to these valid points, there is a need to study whether to continue or discontinue the Rs5,000 denomination note."

PAC member Sheikh Rasheed Ahmad raised the issue of fake Rs5,000 currency notes, saying they were used in illegal activities including the facilitation of carrying large amounts without any fear of detection.

Ahmad said the central bank had also received a similar feedback following which certain quarters had demanded the discontinuation of the banknote. However, he said in a cash economy, there might be difficulties in carrying large amounts for business transactions.

Different countries are gradually moving towards digital transactions, which help in tracing trails of the money transacted besides curbing its use in anti-state activities.

PAC members advised the government to mint coins instead of heavily focusing on printing notes.

The deputy master mint told PAC that in other countries there were six to eight kinds of currency coins. "The cost of minting a coin is Rs3 but it lasts up to 40 years. In comparison, the cost of printing a Rs100 denomination note is just Rs3.6, but it lasts only from six months to two years." PAC refused to take briefing from the SBP deputy governor on the recent devaluation of the rupee.

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Source: The Express Tribune