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Business

AFP
August 9, 2012

Open market currency sellers charge significant premium for fresh notes

Business

AFP
Thu, Aug 09, 2012
LAHORE: Open sale of fresh currency notes at significant premium price has started in Lahore as the demand for them prior to Eid has risen considerably.
New currency notes are not only being sold by the currency dealers in the city markets but also in the surroundings of the State Bank of Pakistan (SBP) regional office building. The premium of different notes is varying from Rs 100 to 250 per bundle.
The maximum premium is for the 50 rupees note bundle as it is in great demand. While commercial banks claimed that they did not receive the 50 rupees notes bundle, the SBP claimed that it had issued Rs 50 packets as well Rs 10, Rs 20, Rs 100, Rs 500 and Rs 1000 note bundles.
In the open market, the currency dealers have been charging Rs100 to Rs150 on Rs10 bundle, Rs150 to Rs200 on Rs20 packet and Rs130 to Rs180 on Rs100 bundle and Rs250 per bundle on Rs50 notes.
The SBP, through its circular dated July 30, 2012, announced full utilisation of banking network of over 10,000 branches of commercial banks for distribution of fresh currency notes to the general public during Ramazan.
The SBP has issued instructions to SBP Banking Services Corporation (SBP BSC) and commercial banks to issue only one packet each of Rs 10 and Rs 20 per person to the visiting general public/ account holders from August 1, 2012 till the last working day before Eid-ul-Fitr 2012 (or until stock ends) on presentation of original Computerised National Identity Card along with the photocopy of it for bank records.
Banks’ branches may also issue a maximum of five packets each of Rs 10 and Rs 20 denomination fresh notes to their corporate clients on receipt of request on the company’s letterhead duly signed by the authorised representative.
However, despite the issuance of these instructions and the supply of fresh notes to the banks, people are not getting fresh currency from commercial banks.
A branch manager of an Islamic commercial bank said that he had send a request for fresh currency notes to its regional head office but so far not a single bundle of Rs 10, Rs 20, Rs 50 and Rs 100 had been received while Rs 500 and 1000 was arriving regularly, which was also being put into the ATM machine.
Another branch manager of a conventional banking said that only limited supply had arrived, which had been delivered to selected corporate clients. These corporate clients had placed orders for the fresh currency notes in advance and therefore, they were given priority, he said.
He said the branch was waiting for further supply of new currency notes, when received would be delivered to the other account holders too. He said the SBP BSC had put in place a mechanism for penalising the banks in case any irregularity was committed by them in issuance of fresh currency notes.
The SBP has also issued serial numbers to notes city-wise to prevent any irregularity in the distribution of notes. However, miscreants have found a way out of this by practicing inter-city currency note exchanges.
There is need to make a law to stop the sale of currency notes in the open market if the SBP is serious to curb the unlawful conducting of business of fresh currency notes in the country, a banking sector official said.