|19 December, 2016

Now demonetisation in Pakistan? Senators recommend banning 5,000 rupee notes

Withdrawal of high denomination notes would encourage use of bank accounts and reduce size of undocumented economy

Image used for illustrative purpose. A currency dealers counts Pakistan rupee bills in Karachi May 20, 2008.

Image used for illustrative purpose. A currency dealers counts Pakistan rupee bills in Karachi May 20, 2008.

REUTERS/Athar Hussain

Monday, Dec 19, 2016

Islamabad: The upper house of Pakistan’s parliament on Monday adopted a resolution recommending the withdrawal of 5,000 rupee (Dh175) notes from circulation, in order to curb the flow of illicit funds.

Senator Usman Saif Ullah Khan of the Pakistan Muslim League tabled the resolution, which was endorsed by the majority of lawmakers in the upper house of parliament.

The, resolution passed by the 100-member Senate, said the withdrawal of high denomination notes would encourage the use of bank accounts and reduce the size of the undocumented economy.

It said the withdrawal should take place within three to five years.

The upper house’s recommendation, which appears to be inspired by recent demonetisation in India, is unlikely to be accepted by the government of Prime Minister Nawaz Sharif.

Law Minister Zahid Hamid told the Senate that withdrawal of the notes would create crises in the market.

He said currently 3.4 trillion notes are in circulation in the country, of which 1.02 trillion notes are of rupee 5,000 denominations.

By Mohsin Ali Correspondent

Gulf News 2016. All rights reserved.

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