Pakistan Senate proposes scrapping 5,000 rupee note

[SL_Fan]

Pakistan's Senate has recommended scrapping the country's 5,000 rupee ($48; £38.50) banknote, despite government opposition.

A resolution, which is not binding, has called for the government to remove the notes to "reduce illicit money flow."

Two months ago, India's Prime Minister Narendra Modi surprised the country by scrapping 1,000 rupee and 500 rupee notes overnight.

The move led to acute currency shortages in India.

Tax amnesties

Scrapping the Pakistani banknote was proposed by Senator Osman Saifullah Khan, who said it was being used in illegal transactions and should be withdrawn, Pakistan Today reported.

He said the banknote should not be withdrawn overnight, but over a period of three to five years.

Law minister Zahid Hamid opposed the resolution, saying the move would hamper business activities.

Pakistan has a large informal economy. The government has offered tax amnesties to try to expand the country's tax base.

The 5,000 rupee note accounts for almost one third of the 3.3 trillion rupees of notes in circulation in Pakistan.

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[Varun]

Rs. 5000 is excessive in the first place.

Just like the new Rs. 2000 note here, but I have a hunch Modi will demonetize it right before the end of his term.

 

[Syed1]

Rs. 5000 is excessive in the first place.

Just like the new Rs. 2000 note here, but I have a hunch Modi will demonetize it right before the end of his term.

They are asking the 5000 note to be demonetized over a period of 3-5 years, since the amount of 5000 notes in circulation runs into the trillions of ruppees.

If we follow India's footsteps completely it would lead to a cash crunch just like in India.

 

[Moh@n]

They are asking the 5000 note to be demonetized over a period of 3-5 years, since the amount of 5000 notes in circulation runs into the trillions of ruppees.

If we follow India's footsteps completely it would lead to a cash crunch just like in India.

The cash crunch here was a planned move. Modi wanted to bring everyone into the online banking net by force. So unless there is a cash crunch, people won't bother with online transactions.

 

[Syed1]

The cash crunch here was a planned move. Modi wanted to bring everyone into the online banking net by force. So unless there is a cash crunch, people won't bother with online transactions.

Only time will tell how successful the move is. Desi people still wholly rely on cash for their day to day transactions.