The federal cabinet will today decide whether to allow some citizens to exchange old notes until December 31, 2026.
Although the old currency notes were declared void almost 5 years ago, the State Bank of Pakistan (SBP) and the Ministry of Finance have both suggested that the deadline be extended.
As per reports, the government has proposed extending the deadline for exchanging outdated notes by another five years. The extension has been approved by the Ministry of Finance, based on a proposal from the SBP board.
Collecting demonetized notes from people unaware of any exchange facility and having them exchanged for new notes at central bank counters has become an informal business. People who have amassed a huge number of these notes in the past will benefit from the proposed five-year extension.
Regardless, the SBP believes that in developed-world central banks, where old legal money can be swapped at any time, one door must remain open for persons who were unable to redeem their holdings on time.
Arguably, according to the SBP Act, the central bank is the sole issuer of banknotes in Pakistan, and the federal government deems legal tender and exchangeable any series of banknotes of any denomination as per the suggestion of the SBP board.
It is noteworthy to point out that having currency notes demonetized six years ago, the central bank has changed its mind about canceling them.
The vintage Rs. 500 banknotes were the last of the central bank’s historic series to have been dropped from circulation as the new currency notes were being pushed for immediate use. Historically, the country’s third-largest currency note was initially positioned for de-circulation on September 30, 2011, and this deadline was later extended to October 1, 2012.
