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New notes

August 08, 2012

EID and Eidi go together, for children especially. For that reason demand for new, unsoiled currency notes, especially of smaller denominations, goes up as Ramazan winds down. Yet brand new currency notes are not to be found precisely where they should be. As reported in this newspaper yesterday, Karachi banks were not delivering the promised notes from the State Bank of Pakistan (SBP) till Monday afternoon. When a reporter asked for the reason, the response of tellers at various banks ranged from “sorry we don’t have them” to the snappy “come next week” retort. Yet there is plenty of fresh currency to be had at the Bolton Market currency bazaar, available at a premium.

The SBP had announced on July 30 that it had made “elaborate arrangements” for supplying new bills to commercial banks by Aug 1. The banks were also told they would be penalised if they didn’t conform to the SBP’s rules, which included a ceiling for each customer and the presentation of a CNIC if an account holder wanted new notes. While these rules made sense, the SBP should also have ensured the timely availability of the new currency at the banks. As usual, it appears the first recipient of the fresh currency was the thriving black market, where notes are available in bulk. How the currency operators were able to beat the banks in the race for the new stocks should not be difficult for SBP authorities to discover. The story in Karachi is undoubtedly being replicated in other parts of the country. There is, however, still time for the central bank to fix the problem and ensure that people across the country can receive their Eidi as it should be: fresh, clean and crisp.