The State Bank of Pakistan is to demonetise old banknotes of Rs 500 from October 1, 2011, after formal approval by the federal Cabinet, official sources in the Finance Ministry told Business Recorder. In terms of section 24 of SBP Act 1956 the SBP has the sole right to issue banknotes. Furthermore, section 25(2) of SBP Act 1956 empowers SBP to demonetise banknotes on the recommendation of the Central Board and with the approval of federal government.
Sources said process of issuance of existing series of new design banknotes started from August 2005 and was completed in July 2008. The Rs 500 new design banknote was issued on November 11, 2006. Since sufficient quantity of new design banknotes are in circulation, therefore, the Central Board of SBP has recommended demagnetisation of Rs 500 old design banknotes. Pakistan Security Printing Corporation has endorsed the proposal.
"The Finance Ministry has proposed to the federal Cabinet that approval may be accorded for demagnetisation of Rs 500 old design banknote whereby it will cease to be legal tender with effect from October 1, 2011," the sources added. According to sources, Finance Minister Senator Abdul Hafeez Sheikh has already given green signal to the ministry for submission of a summary to the federal Cabinet.
Comments
Comments are closed.