New Delhi: An exercise somewhat similar, but not the same as India’s demonetisation, is currently underway across the border in Pakistan. The State Bank of Pakistan, that country’s central bank, started a process to phase out banknotes of older design and gave the general public six years to exchange their currency.
The federal government decided that banknotes of the denomination of Pakistani rupees 10, 50, 100 and 1,000 will cease to be legal tender from December 1, 2016. However, a notification issued by the State Bank of Pakistan on June 11, 2015 stated that the old notes are exchangeable at banks till November 20, 2016. But field officers of the central bank will continue to accept the notes of older design till December 31, 2021.
The Pakistani exercise is dissimilar to the demonetization being carried out in India. It is a phasing out of bank notes of old design and replacing them with newer designed currency. It is not meant to rein in black money.
The Indian government decided to withdraw banknotes of Indian Rs. 500 and 1,000 in order to combat black money. The public has been given time till December 31, 2016 to exchange their old bank notes for new notes of Rs 500 and 2,000 that the Reserve Bank of India has issued.
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