Taking cue from India, now Pakistan passes resolution for demonitisation of its Rs 5,000 currency notes

December,21,2016:

Step to be taken to encourage the use of bank accounts and reduce the size of the undocumented economy.

On Monday Pakistan’s Senate  passed a resolution seeking withdrawal of Rs. 5,000 currency notes “in a phased manner” to curb the black money's flow in their economy, few weeks after demonetisation in India.

Usman Saif Ullah Khan, the Senator  of Pakistan Muslim League proposed the resolution that was approved by majority of the lawmakers in the Upper House.

The resolution said that this withdrawal will encourage the use of the bank accounts & lead to significant reduction in the  undocumented economy.

It said that withdrawal of the notes should take place within 3 to 5 years in order to expel markets of the notes.

Zahid Hamid, the Law Minister of Pakistan, said that the withdrawal of the notes will lead to crises in the market & people will turn to foreign currencies.

He also said that at present 3.4 trillion notes are in circulation in Pakistan out of which 1.02 trillion notes are of the domenation Rs 5,000.

The move is apparently inspired by India’s recent demonetization drive, in which notes of ₹1,000 and ₹500 have been pulled from circulation.