For many years, successive governments in Pakistan have acknowledged that high-value paper currency, such as the US dollar, the 5000 Pakistani Rupee note, and unregistered Prize Bonds, contribute to the problem of corruption and should be discontinued. Over the past decade, the State Bank of Pakistan has repeatedly announced plans to phase out these forms of currency, but each year they grant an extension. This year, despite the fact that registered Prize Bonds have been in circulation for two years, the unregistered ones have been given another extension.
The availability of high-value paper currency makes it easy for corrupt individuals to offer cash bribes and keep their wealth at home. In contrast, developed countries typically only have low-value paper notes. For example, in the US, only bills up to $100 are available, and in the UK, only notes up to £50 are in circulation.
If the Pakistani government and the State Bank of Pakistan are serious about significantly reducing corruption and making it harder for corrupt individuals, they should immediately phase out high-value paper currency, including US dollars, unregistered Prize Bonds, and the 5000 Rupee banknote. This move would also increase tax collection, eliminate black markets, reduce the exchange rate for US currency, and encourage savings in banks.
SHAHRYAR KHAN BASEER P.ENGR.,