Cabinet questions polymer notes

Committee formed to review SBP's new banknote designs and proposed Rs10 coin switch

ISLAMABAD:

Cabinet members have raised questions over the use of polymer substrate banknotes and observed that further analysis was required regarding the possible discontinuation of the Rs10 banknote.

The issue was taken up in a recent high-level meeting chaired by Prime Minister Shehbaz Sharif.

Sources said that during the discussion, cabinet members observed that greater diligence was required in relation to the use of polymer substrate banknotes to ensure that the material was fit for human use, especially given the possibility of young children chewing them instinctively.

The cabinet members further observed that the proposal regarding the discontinuation of the Rs10 banknote needed to be analysed in greater detail from the perspective of production cost and useful life vis-à-vis the Rs10 coin.

After extensive discussion on the matter, and in view of these observations raised by cabinet members, the cabinet decided to refer the issue to a cabinet committee to examine in detail the design and other features of the new banknotes proposed by the State Bank of Pakistan (SBP).

The Finance Division informed the cabinet that the SBP had introduced the existing banknote series in 2005.

During the intervening two decades, banknote designs and security features had witnessed substantial improvements owing to advancements in technology.

The SBP Board had accordingly recommended the introduction of a new banknote series to improve and strengthen security features, enabling the public to easily differentiate between genuine and counterfeit notes.

The new series was also aimed at leveraging the latest developments in banknote printing technology to improve the look and feel and enhance the counterfeit resilience of the banknotes.

The new banknote series had been designed by M/s De La Rue International Limited (UK), hired through a competitive process under the PPRA framework.

The Finance Division further informed the cabinet that the salient features of the new banknote series included state-of-the-art security features that were visually conspicuous and identifiable to the naked eye, such as a wider windowed security thread of 4mm in higher denomination banknotes, Spark-Special motifs printed in Optically Variable Magnetic Ink (OVMI) with holographic 3D dynamic and colour-shifting effects in higher denominations.

The new notes would also result in an enhanced version of 3D multi-toned watermarks, see-through designs and tactile marks in Rs100 and above denominations, as well as high-contrast large numerals for visually impaired persons.

The new banknote series also featured a fresh portrait of Quaid-e-Azam Muhammad Ali Jinnah, sourced from the National Archives of Pakistan, while the use of crescent and star motifs, along with geometric and floral patterns inspired by Islamic art, provided cultural depth to the notes.

The SBP Board had also recommended the discontinuation of the Rs10 banknote in the new series and its replacement with the Rs10 coin, which was already being minted. The recommendation was made in view of the very high printing cost of around 25% of the face value, low purchasing power and limited useful life of less than nine months. With the discontinuation of the Rs10 banknote, the Rs20 note would become the lowest denomination banknote in the new series.

The SBP Board had also recommended printing one denomination on polymer substrate to assess the behaviour of polymer banknotes under local climatic conditions and cultural dynamics, as well as public response. Accordingly, it was proposed that the Rs1,000 banknote may be issued on polymer substrate and, based on the results, a decision on printing other denominations on polymer substrate would be taken with the approval of the federal government.