Islamabad: The federal cabinet has constituted a high-level committee under the chairmanship of the Finance Minister to examine whether the Rs10 banknote should be retained or phased out and replaced with a Rs10 coin. The move comes amid growing concerns over the rising cost of currency production and the long-term sustainability of lower-denomination banknotes.
According to official sources, the committee has been tasked with reviewing all relevant aspects of the issue and submitting concrete recommendations to the federal cabinet. The cabinet will take a final decision in light of the committee’s findings and proposals.
Sources said the committee has been specifically directed to assess the production cost of the Rs10 banknote and determine whether continuing its issuance is economically viable. In recent years, the cost of printing banknotes has increased significantly due to higher prices of raw materials, security features, and printing processes. As a result, the government is reviewing whether lower-denomination notes, which tend to have a shorter lifespan, should be replaced with coins that are generally more durable.
The committee will also analyze whether introducing a Rs10 coin would be more cost-effective in the long run compared to the banknote. Coins typically have a much longer circulation life than paper currency, often lasting decades, whereas banknotes of lower denominations wear out quickly due to frequent use and need to be replaced regularly. This frequent replacement adds to the financial burden on the national exchequer.
Officials familiar with the matter said the cabinet wants a comprehensive comparison between the two options, taking into account not only production costs but also factors such as circulation life, public convenience, handling, storage, and overall impact on the economy. The committee has been asked to present data-driven recommendations rather than relying solely on theoretical assessments.
The issue of replacing the Rs10 banknote with a coin has been discussed in policy circles in the past as well, but no final decision was taken due to concerns about public acceptance and logistical challenges. Pakistan has previously introduced coins for smaller denominations, but many of them gradually fell out of use due to inflation and a lack of public confidence. The Rs10 denomination, however, still holds practical value in daily transactions, making the decision more complex.
Economic experts note that many countries have successfully replaced low-denomination banknotes with coins to reduce long-term costs. Examples from Europe, North America, and parts of Asia show that while the initial transition may face resistance from the public, coins ultimately prove to be more economical and durable. However, experts also caution that such a transition requires proper planning, public awareness campaigns, and improvements in coin circulation mechanisms.
Sources said the committee will also examine public behavior and acceptance trends, as the success of a Rs10 coin would largely depend on whether people are willing to use and carry it in everyday transactions. In Pakistan, there is a general perception that coins are inconvenient to carry in large quantities, and many people prefer banknotes for ease of handling. Addressing this perception will be a key challenge if the government decides to introduce a Rs10 coin.
Another important factor under consideration is the role of inflation. Over time, inflation reduces the purchasing power of money, which in turn affects the practicality of certain denominations. Some analysts argue that as prices rise, lower denominations gradually lose relevance, making it inefficient to continue printing them. Others counter that even with inflation, the Rs10 denomination remains important for small transactions, especially for low-income groups and in informal markets.
The committee is also expected to consult with the State Bank of Pakistan (SBP), which plays a central role in currency issuance and management. The SBP is likely to provide technical input on printing costs, currency lifespan, anti-counterfeiting measures, and the operational implications of introducing a new coin or continuing with the banknote.
In addition, the committee may seek input from stakeholders such as commercial banks, retailers, transport operators, and consumer groups to understand how a change in the Rs10 denomination could affect daily economic activity. Transport fares, small retail purchases, and public services often rely on lower-denomination currency, making stakeholder feedback particularly important.
Government sources emphasized that no immediate decision has been taken and that the formation of the committee is part of a broader effort to rationalize costs and improve efficiency in public spending. The federal cabinet wants to ensure that any decision taken is financially sound, administratively feasible, and socially acceptable.
Once the committee completes its review, it will submit its recommendations to the federal cabinet. Based on these recommendations, the cabinet will decide whether to continue issuing the Rs10 banknote, replace it with a coin, or explore alternative options. Officials said the decision would be implemented gradually to avoid disruption and allow the public to adjust.
In conclusion, the formation of a committee under the Finance Minister to examine the future of the Rs10 banknote reflects the government’s focus on cost efficiency and long-term planning. By carefully weighing the production costs of banknotes against the durability and potential benefits of coins, the federal cabinet aims to make an informed decision that balances economic considerations with public convenience. The final outcome will be determined after the committee submits its recommendations, which are expected to play a decisive role in shaping Pakistan’s currency policy regarding lower denominations.
