Govt panel recommends phasing out Rs10 note to save up to Rs50bn

A high-level government committee has submitted its report to the federal cabinet on the proposal to phase out the Rs10 currency note and replace it with a coin.

The committee, headed by the finance minister, prepared the currency management report under the relevant laws governing the State Bank of Pakistan and the Security Printing Corporation of Pakistan. The findings focus on the financial and operational impact of continuing to print low-denomination notes.

According to the report, the average lifespan of a Rs10 banknote is between six and nine months, after which it must be withdrawn and replaced due to wear and tear. In contrast, a Rs10 coin remains in circulation for 20 to 30 years.

The report said that around 35 per cent of the total banknotes printed annually in the country consist of Rs10 notes, placing a heavy recurring burden on printing and replacement costs.

It estimated that introducing a Rs10 coin in place of the note could generate savings of at least Rs40 to Rs50 billion over a 10-year period. The annual cost of printing, replacing and managing Rs10 notes is currently estimated at Rs8 to Rs10 billion.

While the upfront cost of minting coins is higher, the report highlights that coins do not require frequent replacement and can remain in circulation for decades, making them more cost-effective over time.

The cabinet is expected to review the recommendations before taking a final decision on the future of the Rs10 note.