Central bank says a redesigned Rs5,000 banknote is being developed, with the new currency potentially entering circulation within a year.
ISLAMABAD: Counterfeiting of Rs5,000 banknote has become easier with advances in technology, the State Bank of Pakistan (SBP) told a Senate committee on Wednesday as the central bank moves towards introducing a redesigned note.
The issue was discussed at a meeting of the Senate Standing Committee on Finance and Revenue, chaired by Senator Saleem Mandviwalla at Parliament House.
The committee examined matters relating to currency security, remittances, protection of foreign investments and alleged fraudulent practices by companies.
New Rs5,000 note being designed
The committee chairman raised the issue of three Rs5,000 notes that had been submitted to the SBP for verification nearly two years ago, saying the central bank’s response was still awaited.
The SBP Deputy Governor told the committee that the existing Rs5,000 banknote was introduced in 2005, while technological advancements had subsequently made counterfeiting more difficult to control.
He said the SBP had advertised a tender under Public Procurement Regulatory Authority (PPRA) rules for designing a new banknote.
Four bidders participated in the tender, after which a contract was awarded to a consultancy firm. The firm is currently incorporating the required changes into the proposed design.
The new design will subsequently require approval from the federal government.
New notes could take a year to enter circulation
The committee was informed that it could take approximately one year for the redesigned Rs5,000 notes to be introduced into circulation.
The printing cost of a single Rs5,000 banknote is approximately Rs14, according to the briefing.
Mandviwalla directed the SBP to provide the committee with complete details of the bidding process and expressed concern over the circulation of counterfeit currency.
Senator Anusha Rahman Ahmad Khan called for the approval process for new currency designs to be streamlined so that minor amendments do not result in repeated referrals and unnecessary delays.
Rs120bn remittance subsidy provided
The committee also received a briefing on the Pakistan Remittance Initiative (PRI).
The SBP governor told lawmakers that the government had initially provided subsidies to banks to facilitate remittances sent by overseas Pakistanis.
The government had provided approximately Rs120 billion under the subsidy programme, but the support was curtailed during the previous year.
Due to fiscal constraints, the government could not continue the subsidy under the current budget. Banks have therefore decided to absorb the associated costs from their own resources to ensure that remittance services remain accessible to overseas Pakistanis.
The committee welcomed the banks’ decision and agreed to invite selected banks to its next meeting to brief lawmakers on their performance and contribution to the remittance sector.
Senate seeks details on foreign investor cases
The committee also reviewed the Foreign Exchange Circular, 1999, concerning the protection of investments and deposits belonging to foreign investors in Pakistan.
The SBP Deputy Governor said the relevant instructions had been communicated to concerned banks at the time to protect foreign investors’ funds.
According to SBP records, no such case was currently pending with the central bank.
The committee, however, expressed concern over reports that some cases involving foreign investors could still be pending and sought a detailed statement identifying such cases, their current status and reasons for any delay.
Committee raises concerns over alleged corporate fraud
The committee also discussed concerns about companies operating in Pakistan that may report losses while allegedly engaging in fraudulent practices or misleading investors and shareholders about their financial condition.
Senator Talal Mehmood warned that some companies could eventually collapse or leave Pakistan, potentially causing financial losses to shareholders and members of the public.
He urged the government and relevant regulatory authorities to strengthen scrutiny of such companies and take timely action against fraudulent practices.
The committee stressed the need for stronger oversight to protect investments and safeguard the hard-earned money of the public.