Date of Exchanging old banknotes extended till 2022

Ibn-e-Ameer

The federal government has approved an extension to exchange old design banknotes up to Rs 1000 till December 31, 2021.

Earlier, the government had set a deadline for exchanging old design banknotes of Rs 10, Rs 50, Rs 100, and Rs 1000 up to December 31, 2021.

The Finance Division had proposed the government extend the date of exchanging old banknotes of Rs Rs 10, Rs 50, Rs 100, and Rs 1000 up to December 31, 2026.

However, the cabinet had approved an extension in exchange for old banknotes up to December 31, 2022.

The State Bank of Pakistan (SBP) considered that fixing a deadline for exchanging old design banknotes and rendering them valueless after that date may deprive certain individuals who for some reason failed to exchange old design banknotes.

The central bank further considered that keeping in view the practices of the central bank in the developed world whereby old legal render could be exchanged from the central banks at any time, one door must remain open for people of Pakistan who could not redeem their holdings in a timely basis.

The denomination practices in different countries of the world differ from each other.

The United States government had adopted a policy whereby all banks notes issued by the Federal Reserve Bank remained legal render regardless of their date of issuance.

It did not demonetize old design banknotes and they remained perpetually exchangeable.

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The Reserve Bank of Australia also followed a similar practice. The bank of Canada had recently revoked the legal render status of some denominations from all previously issued series.

The bank of England, European Central Bank, Swiss National Bank followed the practice bank of Canada had adopted regarding old design banknotes series.

Countries like India, Malaysia, and Pakistan had revoked the legal render status of old design banknotes in the first issuance.

After a reasonable time for their exchange, these had subsequently demonetized old banknotes.