TAXILA, Aug 7: With Eid just around the corner, the demand for new currency notes which are distributed as Eidi has increased, and the black market has started to take advantage of the rising demand.

Several people, especially businessmen and youngsters, arrived at local banks of Taxila and Wah Cantt to acquire the new currency notes. However, various banks, including the National Bank of Pakistan, are not issuing new notes to the general public.

Although the State Bank of Pakistan has banned the sale of new notes, the practice goes unchecked and the black market of freshly issued notes is becoming a challenge for the SBP as it hampers free circulation of new notes.

This illegal trade has been adopted as a permanent source of livelihood by some small traders and retailers, even though the SBP had announced that the central bank and commercial banks would provide new notes free of cost.

A survey of various markets revealed that in general a bundle of Rs10,000 (100 hundred-rupee notes) was sold at Rs 10,100. This one percent increase applied to all denominations.

However, on special occasions, this ratio increased manifold, and depended on the customer who bargained the rate.

Customers at various banks alleged that local traders, in connivance with some bank officials, were hoarding and selling new currency notes at exorbitant rates.

Khalid Mehmood, a customer at a bank, said he was going back empty handed as bank officials had refused to provide a bundle of Rs10 claiming they did not have any left.

He accused the staff of being in league with black marketers.

Similarly, Rohail Ahmed, a student of a local college, said he got a bundle of Rs10 (worth Rs1,000) after paying Rs1,030 to a local shopkeeper who drew a bulk of new currency notes from the local market.

An official in a local branch, on condition of anonymity, said the SBP had supplied a large number of new currency notes but bank authorities were trying to hide these so that they could later sell the notes to brokers and earn a share of the profit.

He also acknowledged the covert black marketing of the new notes, but said the business only boomed for a narrow time frame.

When contacted, a spokesperson of SBP in Rawalpindi said the banks had been instructed to issue new currency notes to their account holders. He said the notes were available with the banks and any customer who was refused the service could send a complaint to the SBP.

He added that the serial numbers of the new currency notes had been recorded to monitor their distribution and to check their use by currency brokers.

The SBP official said it was the responsibility of law enforcement agencies to stop the sale of new currency notes outside banks, adding that the SBP had laid out the procedure for the issuance of currency notes.

“The SBP has devised a mechanism to penalise banks and bankers found involved in any irregularity in this regard,” he added.