Cabinet extends old-design banknotes exchange date

SBP BoDs had sanctioned the extension for currency notes of value Rs10, Rs50, Rs100 and Rs1000

ISLAMABAD:

The federal government has decided to extend the date for the exchange of old-design currency notes of denomination Rs10, Rs50, Rs100 and Rs1,000 until December 31, 2022.

The federal cabinet approved a summary sent by Ministry of Finance in this regard.

According to the minutes of the meeting of cabinet available with The Express Tribune, the finance ministry officials maintained that the State Bank of Pakistan (SBP) Board of Directors (BoDs) had sanctioned the extension for the exchange of old-design currency notes of value Rs10, Rs50, Rs100 and Rs1000 on June 25, 2021.

Read more: Cabinet to ponder extension for old banknotes

The document stated that the BoDs had made the endorsement under sub-clause 2 of Section 25 of SBP Act 1956, adding that the finance ministry also agreed with the recommendations of the BoDs.

The Finance Division told the cabinet members that policies pertaining to the return of currency notes in different countries varied.

The cabinet officials were informed that the banknotes issued by the Federal Reserve Bank in the United States always maintained their legal value and are not discontinued, returned or exchange.

The banknotes issued by the US Federal Reserve Bank remain in circulation while the flow of old banknotes is never stopped.

The cabinet was further apprised that the same policy was applicable in Australia as the banknotes in the country were not discontinued or returned or exchange.

It was stated that recently in Canada, a few currency notes were discontinued, however, they were exchangeable. Consumers can make transactions with the old currency notes if they wish to. The Bank of England, European Central Bank and Swiss Bank also follow the same policy.

In countries like India and Malaysia, a time period is fixed for the exchange of old-design currency notes after which they are cancelled.

Also read: Govt drops plan of suspending banknotes’ varnishing

The summary, quoting the SBP, noted that a few people were unable to exchange the old-design currency notes after the fixation of date for their return.

The federal cabinet after mulling over the matter approved the extension for the exchange of old-design currency notes of denomination Rs10, Rs50, Rs100 and Rs1,000 until December 31, 2022.

The finance ministry officials confirmed the development saying that a formal notification in this regard would be issued soon.

The last PML-N government had banned the use of old-design currency notes having value of Rs10, Rs50, Rs100 and Rs1,000 with effect from December 1, 2016.