Federal Budget 2024-25: Is govt abolishing Rs5,000 notes in Pakistan?

Calls for abolishment of the Rs5,000 banknote aren’t something new
An udnated image of Rs5,000 note. — Freepik
An udnated image of Rs5,000 note. — Freepik

With only few weeks left for the announcement of federal budget for fiscal year 2024-25, the Overseas Investors Chamber of Commerce (OICCI) has urged the government to abolish Rs5,000 denomination notes in order to encourage digital transactions.

The investment body, comprising of 200 multinational companies that represents foreign investors, submitted its recommendations as Muhammad Aurangzeb-led Ministry of Finance gears up to present this government’s first budget in the lower house on Friday (June 7). However, it should be noted that the final decision regarding the announcement of the finance bill will be taken by the National Assembly.

Call for abolishment of the Rs5,000 banknote aren’t something new as last year Pakistan Tehreek-e-Insaf (PTI) Senator Mohsin Aziz had tabled a resolution in the upper house of Parliament seeking ban on the highest denomination of Pakistani currency to end the “corruption and rein in inflation”.

Earlier in September 2023, former Federal Board of Revenue (FBR) chief Shabbar Zaidi insisted that the discontinuation of Rs5,000 notes and curbs on the physical movement of dollars was key to curbing the cash economy in the country.

Zaidi was of the view that currency circulation was very high in Pakistan and the Rs5,000 note provides convenience in the cash economy, adding that people have kept wealth in their lockers in dollars and Rs5,000 notes, which should be banned.

The OICCI further suggested making the national tax number (NTN) mandatory for bank accounts, sale and purchase of the cars, sale of expensive properties, those undertaking foreign travels or acquiring memberships in different clubs.