A majority of banking companies have failed to meet the deadline to issue machine-based, authenticated Rs. 50 banknotes.
They were supposed to authenticate Rs. 50 notes through recommended machines but these banks cited issues including the high frequency of currency notes of this denomination and limited resources.
The central bank, hence, extended the deadline for the third time from January 02, 2020, to January 04, 2021. Previously, it had extended the deadline from January 02, 2019, to January 02, 2020.
The banks have, however, accomplished their target of verifying the authenticity of banknotes from Rs. 100 and above.
The central bank issued instructions to banks aimed at ensuring issuance/disbursement of machine authenticated genuine banknotes by banks through their branches/ATMs to promote interbank cash exchange/trade, acceptance of fit/re-issuable banknotes by SBP-BSC only as a last resort against a service charge, and eliminating redundancies in the existing cash operations of banks and promoting clean notes in the economy.
In 2015, commercial banks and microfinance banks under “Currency Management Strategy” had kicked off the verification and authentication of currency notes throughout the country in different phases.
Commercial banks successfully implemented the first phase of the strategy by installing machines at various branches in 30 cities and districts and circulating tested and authenticated banknotes of Rs. 500 and above including Rs. 1,000 and Rs. 5,000.
The next phase was implemented in 2016 for all denominations of banknotes until January 02, 2018.
In the last phase, banks were asked to disburse banknote denomination of Rs. 50, which is yet to be completed. The lower banknote denominations of Rs. 20 and Rs. 10 have been excluded from the Currency Management Strategy.
Commercial and microfinance banks have set up special centers in different cities and installed high-tech machines for the verification of banknotes.
The objective of the strategy is to improve the supervision and regulation of commercial banks and cash processing centers/houses for assuring good quality banknotes in circulation and combating counterfeiting. It aims to introduce modern, reliable and easily recognizable security features in banknotes.