In a move aimed at curbing corruption and enhancing security features, the State Bank of Pakistan (SBP) has announced plans to replace almost all currency notes currently in circulation starting February 2024.

Speaking to journalists ahead of the monetary policy press conference on Monday, SBP Governor Jameel Ahmad outlined the central bank’s strategy for gradually phasing out existing currency notes and introducing new ones.

The comprehensive plan, which is on the verge of finalisation, includes the introduction of new notes with fresh colour schemes along with significantly enhanced security features, acknowledging the global need for robust measures against counterfeit currency.

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The decision comes on the heels of the SBP’s acknowledgement that counterfeit notes, predominantly of the Rs1,000 denomination, have been circulating in the economy.

The move to introduce new currency notes is expected to act as a deterrent to corruption, particularly targeting individuals who have stashed illicit funds under sofas, beds, and backyards.

However, the central bank’s initiative may not be without its share of political pressure, as some factions may resist the sweeping changes.

Governor Jameel Ahmad expressed confidence that the stringent measures would pose a formidable challenge for those attempting to replace old notes with new ones, thereby thwarting corrupt practices.

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Furthermore, there had been earlier proposals from various quarters urging the central bank to discontinue the Rs5,000 note, which has been identified as a significant contributor to corruption in the country.

This high-denomination note has been implicated in bolstering the informal economy, as businesses often resort to using it for transactions outside the formal banking system.

Earlier, the central bank discontinued the unregistered prize bonds worth Rs40,000 and Rs25,000, considering they were used for bribes and to make big payments in the informal sector of the economy which is almost equivalent to the size of the formal economy.