ISLAMABAD: Within a month of the controversial demonetisation of high value currency notes in India, Pakistan senate has passed a resolution seeking withdrawal of Rs 5000 notes from circulation to halt money laundering. Senator Usman Saifullah of Opposition Pakistan People's Party tabled the resolution, arguing that the Rs 5000 note was being used in illegal transactions and should be withdrawn. He however, found strong resistance from the ruling Pakistan Muslim League-Nawaz government.
A member of the PPP said the government must withdraw the highest denomination currency note "in order to reduce illicit money flow, encourage the use of bank accounts and reduce the size of undocumented economy." Opposing the resolution, law minister Zahid Hamid said the move would have repercussions on the economy and the masses in general, as is happening in India. He also added that the withdrawal of the notes would create crisis in the market and people would resort to foreign currencies in absence of Rs 5000 notes. Hamid said that around 3.43 trillion Rs 5000 banknotes were in circulation in Pakistan, around 30 per cent of the total currency in flow in Pakistan now.
"Such a huge number of currency notes cannot be pulled from circulation without causing a monetary crisis. If such steps are taken, people will lose confidence in the Pakistani rupee and will instead prefer foreign currency due to the steep drop in supply of local currency notes," he said. Retorting, Saifullah said that instead of withdrawing the Rs 5000 currency note, its printing should be halted and the withdrawal should take place in a time span of three to five years.
Pak ranks 117th on the list of corrupt nations out of 175, according to the 2015 Corruption Perceptions Index reported by Transparency International. Corruption rank in the country averaged 107.90 from 1995 until 2015, reaching an all time high of 144.00 in 2005. Saifullah said the most illegal transactions in the country were carried out using the Rs 5000 note.
