PESHAWAR, March 27: The managing director of the State Bank of Pakistan, Mr Liaquat Durrani, said on Monday that currency notes of Rs5,000 denomination would be issued in May.

Talking to reporters here at the press club, Mr Durrani said that arrangements for floating Rs5,000 currency notes had been completed and is due for issuance in the month of May this year after approval by the president.

He said three methods used in the preparation of fake currency notes were printing, scanning and colour photocopy.

He said new techniques being used in the preparation of currency notes had blocked the circulation of fake notes in the market to a great extent.

He said fake notes were easily detectable with the naked eye, and added that fake currency notes were usually soft and plain while genuine ones were rough to the touch and could be easily distinguished.

About replacing currency notes with coins, Mr Durrani said keeping small currency denomination in coins is an international practice, and added the State Bank of Pakistan used to incur Rs2 billion a year on the printing of currency notes of small denominations.

He further said the life span of a coin is about 30 years, while in case of paper currency it is only three years.

He said the committee constituted by the central bank to suggest measures for fair and transparent circulation of fresh currency notes among the general public has proposed to hand over 100 per cent distribution of fresh currency notes through commercial banks, and added that the committee’s decision was expected within a week or two.

He said that the State Bank of Pakistan would take action against people involved in the Hundi business, if it were brought to their notice.

About the prospects of Islamic mode of banking, Mr Durrani said the State Bank of Pakistan was satisfied with the performance of the Islamic banking division of the Bank of Khyber. He said: “Till date the Bank of Khyber has not achieved any tangible success with the opening of its Islamic banking branches.”

On being asked about the authenticity of the economic growth being claimed by the government, Mr Durrani said that it was based on facts and figures and was being scrutinized by the World Bank and the Asian Development Bank. Therefore, it could not be based on exaggerated figures.

He claimed that unemployment and poverty were gradually declining since 1999.

He said that from 1997 to 2000 the government had no money for going forward with development schemes. He claimed that now the government was able to save up between Rs200 billion and Rs300 billion for implementing its annual development programme.

He said that the economic condition could further improve if the managers of the economy succeeded in arresting debt servicing and establishment charges.

He said that the State Bank of Pakistan in its recent circular has excluded journalists and the legal fraternity from the negative list of commercial banks’ loans, and added that now newsmen could file applications with the commercial banks for obtaining loans.

However, he said that police officials were still on the negative list.—APP