ISLAMABAD: State Bank of Pakistan (SBP) Governor Jameel Ahmed has said that the central bank is evaluating the viability of introducing plastic currency in the country.
He informed the Senate Standing Committee on Finance and Revenue on Wednesday that experiments with plastic currency notes were under way, and they will be issued based on public feedback.
Plastic currency are banknotes made from polymer, a durable plastic material, instead of traditional paper. These banknotes are more resistant to wear and tear, harder to counterfeit and often include advanced security features like transparent windows and holograms.
According to the central bank governor, the purpose of introducing plastic notes is to address the shortcomings of existing paper notes and to make them more secure and durable.
Governor Jameel Ahmed stated that the durability and security features of these notes are being thoroughly evaluated. “If the test results are positive, the notes will be introduced by the end of the current year,” he said.
Plastic notes offer several advantages, including increased longevity and advanced security features, which make them more reliable than traditional paper notes.
Countries such as the United Arab Emirates, Canada, the United Kingdom, Australia, Malaysia, and Singapore have successfully adopted plastic notes, where they have proven to be more secure and long-lasting.
Exchange Companies of Pakistan Secretary Zafar Paracha welcomed the introduction of plastic notes, stating that the change in currency design is essential for Pakistan’s cash-based economy, according to Urdu News.
“The introduction of plastic notes will reduce the problem of counterfeit currency and will be more cost-effective than paper notes,” he said.
Paracha also noted that complaints about counterfeit notes have been increasing, with banks receiving numerous reports of fake currency.
He added, “Due to the change in the design of the notes, the old notes will become unusable, prompting people to bring these notes back into circulation.” According to him, this decision will benefit the economy.
Dr Shahid, a former banker and economic expert, highlighted the potential impact of the currency design change on the economy, suggesting that it could help the government better document economic activities.
However, he also pointed out some challenges, particularly with higher denominations.
“Printing Rs5,000 notes should be stopped as they often facilitate corruption and bribery,” Dr Shahid said. He cited the example of India, where the 5,000-rupee note is not in circulation, despite India’s economy being much larger than Pakistan’s.
Experts have pointed out that Pakistan is among the countries with the highest rate of circulating currency, a factor that contributes to inflation.
Governor Jameel Ahmed told the Senate Standing Committee that the designs of all currency notes in Pakistan will be changed by December. The new designs will include both paper and plastic notes, incorporating advanced security features.