Pakistan is moving on the footstep of India on the issue of demonetization. On November 8, Indian Prime Minister Narendra Modi had taken the decision of banning Rs 500 and RS 1000 note in the country. Now it’s turn of Pakistan to demonetise Rs 5000 currency note.
On Monday Pakistan’s Senate has passed a resolution for the withdrawal of Rs 5000 from circulation in the country.
The circulation has been passed to stop illicit money flows and money laundering in the country.
Senator Usman Saifullah of PPP has put the resolution on the table, arguing that the currency should be withdrawn as it is been used in illegal transactions.
However, the move was strongly opposed by the Pakistan Muslim League-Nawaz (PML-N) government. In the upper house of the Parliament PPP has a majority so the resolution was endorsed in the senate without any hindrance.
According to the party, the move will help to reduce illicit money flow and will encourage people to use bank accounts. Further, it will help to reduce the size of the undocumented economy.
The Law Minister Zahid Hamid opposed this move saying that demonetization of such a high currency can have a negative effect on the economy of the Pakistan and the masses will be facing inconvenience.
According to the minister Rs. 5000 currency should not be pulled out from circulation without harming any monetary crises. If such steps are taken without any planning then that people will lose confidence in Pakistani currency and will prefer using foreign currency.
On November 8, Indian Prime Minister Narendra has announced note ban of Rs 500 and Rs 1000. It was also announced that people can deposit their old currency within 50 days in a bank.
Modi government have taken the decision to crack down the circulation of black money in India.
However, the decision taken by the government have caused chaos in the country. Huge lines were seen outside banks and ATMs, immediately after the announcement.
Last week Australia has also proposed to follow the footstep of India by banning the highest-denomination currency note in the nation.
While talking about ABC ratio, the Revenue and Financial Services Minister Kelly O’Dwyer had said that a review of $100 note and cash payment over certain limits can be flagged.
The Australian government is looking forward to recover billions of dollars in unpaid tax.