Karachi, May 13, 2025 – A group of foreign investors operating in Pakistan has urged the government to demonetize the Rs5,000 currency note as part of a broader push to discourage cash-based transactions and accelerate the country’s shift toward a digital economy.
The call comes through formal budget proposals submitted by the Overseas Investors Chamber of Commerce and Industry (OICCI) for the upcoming 2025-26 fiscal year. In their recommendations, the foreign investors emphasized that eliminating large denomination notes could significantly curb undocumented transactions, enhance transparency, and promote a robust, digitally driven economic structure.
To meet Pakistan’s long-term digitalization goals, the foreign investors stressed the urgent need for joint interventions from both the public and private sectors. They pointed out that Pakistan’s current IT infrastructure lacks the capacity to support widespread banking access, especially in rural areas. This limitation hinders the expansion of digital payment systems across the country.
The investors commended the State Bank of Pakistan (SBP) for launching initiatives like the RAAST instant payment platform. However, they noted that broader measures are needed to reduce cash usage, including the demonetization of high-value currency like the Rs5,000 note. Such steps, they argued, would help formalize the economy and improve financial transparency.
Mandatory digital invoicing across all sectors—not just the Fast-Moving Consumer Goods (FMCG) sector—was another key suggestion. The foreign investors proposed that the government invest in digital payment platforms such as fintech solutions, point-of-sale (POS) systems, e-invoicing tools, and mobile wallets. These systems would not only boost tax compliance among retailers and service providers but also enhance financial inclusion.
To accelerate adoption, the investors recommended that the government offer tax incentives to fintech companies and merchants who support or utilize digital payment systems. Encouraging innovation and supporting digital infrastructure, they believe, will be essential in building a modern economy.
“Demonetization of the Rs5,000 note is a crucial step to discourage cash dealings,” the foreign investors reiterated, urging the government to align with global digital payment trends. They also emphasized the importance of engaging international fintech and e-commerce players to ensure successful implementation of these reforms.