Currency ban in Pakistan: Following India’s footsteps, Pakistan’s senate has passed a resolution that seeks withdrawal of high denomination notes of Rs 5000 to check the money laundering practices in the country.
Pakistan Peoples Party (PPP) Senator Usman Saifullah argued that the high denomination notes were being used for money laundering and thus it should be banned in the country.
Currency ban in Pakistan follows soon after Indian demonetisation policy
The lawmakers showed support for the move, they said that the move will help the country overcome the black money issue and the public would be urged to make use of te digital platforms and the unaccounted money will come back to the banks.
The Pakistani government now awaits the approval of the resolution in order to, “in order to reduce illicit money flow, encourage the use of bank accounts and reduce the size of the undocumented economy.”
“Such a huge number of currency notes cannot be pulled from circulation without causing a monetary crises. If such steps are taken, people will lose confidence in the Pakistani Rupee and will instead prefer foreign currency due to the steep drop in supply of local currency notes”, Saifullah said.
The resolution is not wholly inspired by the Indian demonetisation policy since it mentions that such a step would take 3 to 5 years of time to materialise to avoid hassle to the public. The Law Minister Zahid Hamid said that such a step would cause inconvenience to the public who would then resort to making use of the foreign currencies. He added that the number of high denomination notes that are being circulated in the economy are as much as 1.02 trillion.