Rs5,000 note likely to be discontinued in Pakistan: reports

The government is expected to demonetise Rs5,000 currency notes in the country ahead of the fiscal year 2024-25 budget in order to combat corruption and boost national economy, according to sources.

Sources within the finance ministry said that the government is mulling options to discontinue Rs,5000 notes.

However, the chances to ban the highest currency note are very low, sources added.

The government started consideration on the matter after the Overseas Investors Chamber of Commerce (OICCI) suggested the PM Shehbaz-led government to abolish Rs5,000 banknote to discourage cash transactions.

The investment body, which includes 200 multinational companies, also proposed the government to mandate a national tax number (NTN) for bank accounts, the sale and purchase of cars, the sale of expensive properties, foreign travels and memberships in different clubs.

Last year, reports emerged that the interim government was putting a ban on Rs5,000 banknotes. However, former caretaker Information Murtaza Solangi dismissed the claims, terming it "fake news".

On the other hand, economic experts have been proposing government for so long to discontinue Rs5,000 notes to curb the cash economy in the country.

Earlier in September 2023, former Federal Board of Revenue (FBR) chairman Shabbar Zaidi raised his voice to put a ban on highest denomination of Pakistani currency.

Later, Pakistan Tehreek-e-Insaf (PTI) senator, Mohsin Aziz, had also tabled a resolution in the Senate to demonetise highest banknote to end the “corruption and rein in inflation”.

According to economists, currency circulation is very high in Pakistan and the Rs5,000 note provides convenience in the cash economy.

They said people hide their wealth in their lockers in dollars and Rs5,000 notes.