Excelsior Correspondent
ISLAMABAD, Dec 20: Within a month of demonetisation of high value currency notes in India, Pakistan’s senate passed a resolution on Monday seeking withdrawal of Rs 5,000 notes from circulation to halt money laundering.
Pakistan is ranked 117th on the list of corrupt nations out of 175, according to the 2015 Corruption Perceptions Index reported by Transparency International. Corruption rank in Pakistan averaged 107.90 from 1995 until 2015, reaching an all time high of 144.00 in 2005.
Senator Usman Saifullah of opposition Pakistan People’s Party (PPP) tabled the resolution, arguing that the Rs 5,000 note was being used in illegal transactions and should be withdrawn.
The move was strongly opposed by the ruling Pakistan Muslim League-Nawaz (PML-N) government. However, since the PPP has a majo rity in the upper house of parliament, the resolution was endorsed.
A member of Pakistan People’s Party said that 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 sa id that the move would have repercussions on the economy and the masses in general, as is happening in neighbouring India. He also said that withdrawal of the notes would create crises in the market and people would resort to foreign currencies in absence of Rs 5,000 notes.
Hamid said that around 3.43 trillion Rs 5,000 banknotes were in circulation in Pakistan -around 30% 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 crises. 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,” the minister said.
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