Cabinet raises concerns over polymer banknotes, seeks review of Rs10 note phase-out

The federal cabinet has raised concerns over the proposed use of polymer substrate banknotes and called for a detailed review of a recommendation to discontinue the Rs10 banknote, referring the matter to a cabinet committee for further examination.

According to a news report, the issue was discussed at a recent high-level meeting, where cabinet members questioned whether polymer banknotes were suitable for local conditions and safe for human use, particularly in cases where young children may chew or handle the notes.

Members also asked for a deeper assessment of the proposal to phase out the Rs10 banknote, seeking a clearer comparison of its production cost and lifespan against the existing Rs10 coin before any final decision is taken.

Following the discussion, the cabinet decided to task a committee with reviewing the design, material choice and other features of the new banknote series proposed by the State Bank of Pakistan (SBP).

Briefing the cabinet, the Finance Division said the current banknote series was introduced in 2005 and that significant advances in security features and printing technology over the past two decades had prompted the SBP to propose a redesigned series. The objective, it said, was to improve counterfeit resistance and make it easier for the public to distinguish genuine notes from fake ones.

The proposed new series has been designed by De La Rue International Limited of the United Kingdom, selected through a competitive process under public procurement rules. 

According to the briefing, the notes would incorporate updated security elements visible to the naked eye, including wider windowed security threads in higher denominations, optically variable magnetic ink with colour-shifting effects, enhanced watermarks, see-through features and tactile marks for visually impaired users.

The designs also include a refreshed portrait of Quaid-e-Azam Muhammad Ali Jinnah sourced from the National Archives of Pakistan, along with crescent, star, geometric and floral motifs inspired by Islamic art.

The SBP board has recommended discontinuing the Rs10 banknote in the new series and replacing it with the Rs10 coin, citing a printing cost of about 25 percent of face value, low purchasing power and a short circulation life of less than nine months. If approved, the Rs20 note would become the lowest denomination banknote.

The board has also proposed issuing one denomination — the Rs1,000 note — on polymer substrate on a pilot basis to assess performance under local climatic and usage conditions, with any expansion to other denominations to be decided later with federal government approval.