Pakistan’s currency system could soon see some changes as State Bank of Pakistan (SBP) proposed phasing out the Rs10 banknote and replacing it with a Rs10 coin.
The proposal was discussed during a meeting of the Senate Standing Committee on Finance, chaired by Senator Saleem Mandviwalla, where SBP officials briefed lawmakers on the planned redesign of Pakistan’s currency notes, production costs and measures to tackle counterfeit currency.
Why is Rs10 note being replaced?
Central bank’s Deputy Governor Dr Inayat Hussain said producing Rs10 banknote is relatively expensive compared with its low face value. The central bank has therefore proposed that future currency series should no longer include the Rs10 note. Instead, a Rs10 coin would be introduced.
This does not mean the existing Rs10 notes will suddenly become invalid. SBP officials said the notes already in circulation would be phased out gradually after the new series of banknotes is issued. If the proposal goes ahead, the Rs20 note would effectively become Pakistan’s smallest-denomination banknote, while the Rs10 denomination would continue in coin form.
Rs10 proposal is part of a much larger currency redesign exercise. Pakistani authorties are working on new designs for banknotes ranging from Rs10 to Rs5,000, with modern security features intended to make counterfeiting more difficult. However, the process has already encountered delays.
SBP officials told the committee that the initial designs prepared for the new notes were rejected by a committee headed by the finance minister. Changes are now being incorporated into the designs based on recommendations from the relevant committees.
The Cabinet Committee is currently working on finalising the designs.
Counterfeit currency was another major concern raised during the meeting. SBP officials said counterfeit currency circulation in Pakistan is relatively low compared with other countries, but fake Rs1,000 and Rs5,000 notes are currently more prevalent. Committee Chairman Saleem Mandviwalla claimed that complaints had even emerged about fake currency being dispensed through banks and ATMs.
He said the situation had become serious enough that some shopkeepers were reportedly reluctant to accept Rs1,000 and Rs5,000 notes.
Mandviwalla also shared an unusual incident involving the State Bank itself. He said that around two years ago, he handed three Rs5,000 notes to the SBP deputy governor. According to him, one of the three notes was counterfeit, yet State Bank officials were unable to identify it. The three notes, he claimed, had still not been returned after two years.
He also said the SBP owed him Rs15,000, referring to the value of the three notes. His remarks about the prolonged delay reportedly triggered laughter in the committee meeting.
SBP officials said producing a single Rs1,000 or Rs5,000 banknote costs approximately Rs14. They further explained that the current Rs5,000 note was designed nearly 20 years ago. The plan now is to introduce a completely redesigned version with stronger security features that could remain in use for another 20 years.
The objective is not merely to change the appearance of the notes but to make them harder to counterfeit.
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