The State Bank of Pakistan (SBP) is considering discontinuing the Rs10 banknote as rising production costs put greater pressure on the economics of issuing lower denomination currency. SBP Deputy Governor Dr Inayat Hussain disclosed the development during a meeting of the Senate Standing Committee on Finance and Revenue on Tuesday, where lawmakers reviewed issues related to currency security, remittances, foreign investment protection and alleged fraudulent practices by companies.
According to the briefing, the central bank has proposed discontinuing the Rs10 denomination, with the change expected to be linked to the introduction of new currency notes. The SBP official told the committee that introducing replacement notes into circulation would take approximately one year. The discussion highlighted the broader process involved in redesigning, approving, printing and distributing new currency across Pakistan.
The committee was also informed about the cost of producing higher denomination currency. According to the Senate Secretariat, printing a Rs5,000 banknote costs approximately Rs14. The rising cost of currency production has become an important consideration for the central bank as it reviews the existing banknote structure and prepares a new series.
During the meeting, committee chairman Senator Saleem Mandviwalla raised concerns regarding three Rs5,000 notes that had been submitted to SBP for verification almost two years ago, with a response from the central bank still awaited. The issue brought renewed attention to the problem of counterfeit currency and the effectiveness of existing security measures used in Pakistan’s banknotes.
Dr Inayat Hussain told the committee that the existing Rs5,000 banknote was introduced in 2005 and that technological advancements had made counterfeiting easier. In response, the SBP has initiated work on a new banknote design. A tender was advertised for the design process, attracting four bidders. The contract was subsequently awarded to a consulting firm that is currently incorporating the required changes into the proposed design.
The new design will then require approval from the federal government before the notes can move towards production and circulation. Senator Mandviwalla directed the SBP to provide complete details of the bidding process and also expressed concern over the circulation of counterfeit currency.
Senator Anusha Rahman Ahmad Khan also called for improvements in the approval process for currency designs. She stressed the need to avoid repeated referrals for minor amendments, which can contribute to unnecessary delays in the introduction of updated banknotes.
The latest discussion follows earlier efforts by the central bank to replace Pakistan’s existing banknote series. Earlier this year, the Senate committee was informed that new-design currency notes featuring enhanced security features had been finalised by the SBP and forwarded to the federal cabinet for approval.
The process has been underway for several years. In September 2024, the SBP announced the winners of a competition for designs for the new banknote series. The central bank had initiated the process of designing and issuing new banknotes covering all existing denominations in January 2024. An art competition was subsequently launched in March 2024 to obtain innovative and thematic design concepts for the proposed currency series.
Security infrastructure is also being upgraded as part of the wider currency modernisation effort. In March 2025, Security Papers Limited (SPL) announced that it had awarded a Rs3.4 billion paper machine upgrade project to Germany-based Giesecke+Devrient (G+D). The project included an international tender worth €8.297 million, with completion expected within 18 months. The upgrade is intended to strengthen the infrastructure supporting the production of secure currency paper.
The Senate committee also received a briefing on the Pakistan Remittance Initiative (PRI), under which the government had previously provided subsidies to banks to facilitate remittances sent by overseas Pakistanis. The committee was informed that Rs120 billion had been provided in subsidies, but the support was curtailed during the previous year.
According to the briefing, fiscal constraints have prevented the government from continuing the subsidy under the current budget. Banks have therefore decided to absorb the associated costs from their own resources to maintain remittance services for overseas Pakistanis. The committee appreciated the decision and agreed to invite selected banks to a future meeting to discuss their performance and contribution to the remittance sector.
The committee also reviewed the F.E. Circular, 1999, concerning the protection of investments and deposits belonging to foreign investors in Pakistan. The SBP deputy governor said the relevant instructions had previously been communicated to concerned banks to protect the funds of foreign investors. According to SBP records, there were no pending cases of this nature with the central bank.
However, lawmakers raised concerns over reports that some cases involving foreign investors may still be pending. The committee requested a detailed statement identifying any such cases, their current status and the reasons for any delays.
Senator Talal Mehmood separately raised concerns about companies operating in Pakistan that report losses but may allegedly engage in fraudulent practices or provide misleading information about their financial position to investors and shareholders. He warned that some companies could eventually collapse or leave the country, potentially resulting in financial losses for shareholders and members of the public.
He called on the government and relevant regulatory authorities to scrutinise such companies and take timely action against fraudulent practices to protect investments and the savings of the public. The discussion reflects the Senate committee’s broader focus on financial safeguards, currency security, remittance facilitation and protection of investors as the SBP continues work on modernising Pakistan’s currency system.
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