The federal cabinet made a decision that some residents will be able to exchange old currency notes until December 31, 2026.
The State Bank of Pakistan (SBP) and the Ministry of Finance have both proposed that the deadline be extended, despite the fact that the old currency notes were declared void about 5 years ago.
The government, according to sources, has extended the deadline for exchanging obsolete notes by another five years. On the basis of a request by the SBP board, the Ministry of Finance has accepted the extension.
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Collecting demonetized notes from people who are unaware that there is an exchange facility and having them exchanged for new notes at central bank counters has become a sideline business. The proposed five-year extension will assist those who have acquired a large quantity of these notes in the past.
However, the SBP considers that in developed-world central banks, where old legal money can be replaced at any time, one door must remain open for those who were unable to redeem their assets in a timely way.
According to the SBP Act, the central bank is the sole issuer of banknotes in Pakistan, and the federal government declares any series of banknotes of any denomination legal tender and exchangeable upon the SBP board’s recommendation.
It’s worth noting that the central bank reversed its decision to cancel currency notes six years after they were demonetized.
As the new currency notes were promoted for immediate use, the vintage Rs. 500 banknotes were the last of the central bank’s vintage series to be removed from circulation. Historically, the country’s third-largest currency note was set to be phased out on September 30, 2011, however the date was later pushed out to October 1, 2012.
