PPP Senator Calls for Ban on Rs. 1,000 and Rs. 5,000 Currency Notes in Pakistan

After Indian Prime Minister Narendra Modi’s announcement of demonetisation of Rs1,000 and Rs500 banknotes a few days back, Osman Saifullah Khan, Senator (PPP), has submitted a resolution in the upper house of parliament, seeking demonetization of Rs 5,000 and Rs 1,000 currency notes in Pakistan.

“The house urges the government to take steps to withdraw from circulation as legal tender the high denomination Rs5,000 and Rs1,000 notes so as to reduce illicit money flows, encourage the use of bank accounts and reduce the size of undocumented economy,” reads the resolution.

What Good Will It Yield?

The reasons behind this proposal is to stop and monitor illegal money activities, along with encouraging people to use the banking services more often.

This resolution has the potential to launch a crackdown on black money circulating in the economy, said Saifullah Khan.

State Bank of Pakistan’s Oppostion to the Resolution

SBP has itself opposed the changes. The Rs5,000 denomination was introduced under the government of former president Gen. Pervez Musharraf. The SBP strongly opposed that change since it believed that it made it easier for people to keep cash rather than to deposit and use banking services.

Similarly now, SBP are claiming as there is no reason for the withdrawal of the high currency notes, according to Abid Qamar who is the chief spokesman for SBP.

He said, “At this point, we do not see a reason to withdraw the Rs 5,000 currency note.”

Pakistan’s Economy

Around 100 million adults in Pakistan do not have access to financial services, formal and regulated both, according to a World Bank report.

Official statistics reveal, the citizens of the country have been keen on making a shift towards cash as a response to government’s taxation policies.

In fiscal year 2015-16, Monetary Policy Committee (MPC) meeting revealed that the growth in banking sector deposits was far lower than the previous year while the currency in circulation increased at a much rapid pace.

“People cannot keep money under their pillows,” said Federal Board of Revenue Chairman Nisar Mohammad Khan on Thursday. His argument, however, is not supported by the increase in currency in circulation this last fiscal year.

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  • jab US$ 60 ka ho jae to 5000 should be ban and when it further reduced to 30 then 1000 k notes b band kr do… its fine

  • well I guess banning these high currency notes will be good and they should stop making such coins of 10 or 20(future planned) because it’s not good for the currency position

  • The one’s who are suggesting must have got their big notes changed into gold or foreign currency by now.
    The poor men who must have saved all his life will suffer.

    • The real problem is that we have laws that when you do transaction of more than 50k they still take tax. Even if your are a tax payer. Why will people not keep cash then? Obviously govt has little incitive to keep people off bank notes.

  • Screwup minister forgot to tell that Indians have linked all bank and tax records with identity card. They know each and everyone’s financial dealings. And they haven’t stupidly placed tax on transactions above 50k. Rather they blocked cash transaction of 200000 inr of people who haven’t registered themselves with tax authorities.

  • Even in small shop people use these notes like it has no value Dhaba ma bhi 2 sa 3 chezza ghar ka lia lo to 1000 sa uper ka bill ban jata ha ya currency ki value ha.
    This post proved our MNA doesnt know what its like to be a conman person .I heard people abuse on government on tax detection on mobile credit and they try to change the whole system on this illiterate state of ours sad but pehla awareness do security do log kud tax da ga.
    ppp leaders think we all have black money, instead of making jobs and increase lowest income they burden us for their lifestile. All the gliters are not gold I dont think the logo of developed state make us any good unless government gave right to people to themselves make this country great.
    Ab to America k visa bhi nai lagna trump ka bad is Pakistan ko theek karna para ga

  • The fact that State Bank itself has opposed the ban clearly shows who the real culprits are and they don’t wanna get caught lol

  • The same guy who (almost) insulted Kamran Khan today just because he asked him “What’s your stance on Panama Papers about 34 companies of yours (family)”.

  • I am a Banker and I know that bank lockers are filled with dollars and rupees of 1000 and 5000 notes. PPP has raised a genuine issue but the consequences have to be borne by Govt, not PPP. India is governed by a single man who can bear the pressure, Pakistan Govt is not in position to do the same.

    • And you know better how tax on any transaction above 50k will hurt e-commerce and will choke economy.

  • Senator Saifullah Khan, submitted a resolution to Ban regarding Rs 5000 currency in Senate EVEN his family belong 34 offshore companies if you remember it was ppp who introduced Rs 5000,THORI SHARAM KARO THORI HAYA KARO

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