Demonetisation in Pakistan: Senate passes resolution to scrap Rs 5,000 notes
The country’s lawmakers believe the currency ban will encourage people to open bank accounts and restrict the circulation of black money.
The Pakistani Senate has passed a resolution, seeking the withdrawal of Rs 5,000 currency notes from circulation in the country in a bid to curb black money, reported Dawn. Senator Usman Saif Ullah Khan of the Pakistan Muslim League tabled the resolution on Monday, after which it was endorsed by a majority of the lawmakers in the Upper House.
The legislators believe that the demonetisation of Rs 5,000 bills will encourage people to open bank accounts and also restrict the growth of the shadow economy. According to the resolution, the currency ban will be implemented in phases over the next three to five years to clean the market of this high-value note, reported PTI.
Pakistan Law Minister Zahid Hamid, however, opposed to the decision, saying it will create a crisis in the market and force people to deal in foreign currencies. Currently, 3.4 trillion notes are in circulation, of which 1.02 trillion are in the Rs 5,000 denomination, according to the minister.
Pakistan is the third country after India and Venezuela to demonetise high-value notes in recent months. Venezuelan President Nicolas Maduro, however, put his government’s demonetisation move on hold after violent protests across the country. On December 14, the country had announced that it would withdraw 100-bolivar bills, the biggest denomination currency notes in the country, to stop “mafias” from hoarding it abroad.
In India, Prime Minister Narendra Modi announced the decision on November 8, saying it was aimed at curbing the circulation of black money, ending terror funding and weeding out corruption. The currency ban, however, has left citizens grappling with a cash crunch, with the Centre insisting that there was enough money in circulation and consistently promoting the use the digital transactions.