Cabinet Reviews Polymer Notes, Rs10 Phase-Out Proposal

The federal cabinet has expressed reservations regarding the proposed introduction of polymer-based banknotes and has sought a comprehensive review of the recommendation to discontinue the Rs10 banknote, referring both matters to a cabinet committee for further scrutiny.

According to media reports, the issue was deliberated at a recent high-level cabinet meeting, during which members questioned the suitability of polymer substrate banknotes for Pakistan’s local environmental and usage conditions. Concerns were also raised regarding potential health and safety implications, particularly in situations where young children may chew or frequently handle the notes.

Cabinet members further called for a detailed cost-benefit analysis of the proposal to phase out the Rs10 banknote, seeking a clearer comparison between the production cost, durability and circulation life of the banknote versus the existing Rs10 coin before any policy decision is finalised.

Following the discussion, the cabinet resolved to constitute a committee tasked with examining the proposed design framework, choice of material and other technical specifications of the new currency series put forward by the State Bank of Pakistan (SBP).

In its briefing, the Finance Division informed the cabinet that the current banknote series was introduced in 2005 and that significant advancements in printing technology and anti-counterfeiting measures over the past two decades had prompted the SBP to propose a redesigned series. The stated objective is to enhance security features and improve public ability to differentiate between genuine and counterfeit currency.

The proposed series has been designed by De La Rue International Limited of the United Kingdom, which was selected through a competitive process conducted in accordance with applicable public procurement regulations.

The briefing noted that the new banknotes would feature modernised security elements visible without specialised equipment, including wider windowed security threads in higher denominations, optically variable magnetic inks with colour-shifting properties, improved watermarks, see-through features and tactile markings to assist visually impaired users.

The designs also incorporate an updated portrait of Quaid-e-Azam Muhammad Ali Jinnah sourced from the National Archives of Pakistan, alongside crescent, star, geometric and floral patterns inspired by Islamic art.

The SBP Board has recommended discontinuing the Rs10 banknote in the proposed series and replacing it with the Rs10 coin, citing a printing cost equivalent to approximately 25% of face value, limited purchasing power and an average circulation life of less than nine months. If approved, the Rs20 note would become the lowest denomination paper currency.

Additionally, the Board has proposed issuing a single denomination—the Rs1,000 note—on polymer substrate on a pilot basis to evaluate performance under local climatic and usage conditions, with any future expansion to other denominations subject to federal government approval.