The State Bank of Pakistan (SBP) will accept old-style large-size banknotes of Rs10, Rs50, Rs100, and Rs1,000 until December 31, 2022.
The federal government extended the deadline for exchanging old designed large-size banknotes last year with Gazette Notification F.No.2(1)IF-III/2010 dated December 23, 2021.
However, the central bank clarified in a statement issued today that December 31, 2022, is the “last and final deadline for exchange of such banknotes, after which these banknotes shall no longer be exchangeable from the counters of the SBP Banking Services Corporation (BSC) and thus will lose their value.”
Holders of these old designed large banknotes can exchange them at SBP BSC field offices by December 31 to protect the value of their savings in these banknotes.
Why are the notes being replaced?
It should be noted that the State Bank is the sole issuer of banknotes in the country, and one of its key strategic goals is to ensure an adequate supply of high-quality banknotes throughout the country.
Soiled and unfit banknotes are collected from the market by the SBP and replaced with new ones. The SBP, like other central banks, issues new series of banknotes on a regular basis and demonetizes previous series with the approval of the federal government.
Furthermore, in accordance with Section 25(2) of the SBP Act, 1956, the federal cabinet grants approval for the demonetisation of banknotes based on the recommendations of the SBP Board.
The issuance of new series of banknotes, as well as the demonetisation of old-style banknotes, assists central banks in detecting counterfeit and ensuring the integrity of banknotes in circulation.
From 2005 to 2008, a new series of banknotes was issued, and the old design banknotes were gradually phased out of circulation. As a result, the federal government decided to demonetize old design banknotes of Rs10, Rs50, Rs100, and Rs1,000.