ISLAMABAD -  The government on Monday once again clarified that it had not yet decided to demonetise Rs5,000 note.

The Senate last week passed a resolution seeking withdrawal of Rs5,000 currency notes from circulation in order to curb the flow of black money.

The upper house of the parliament in a resolution suggested to withdraw high denomination Rs5,000 notes, by saying it would encourage the use of bank accounts and reduce the size of the undocumented economy.

However, the Ministry of Finance on Monday said, “Government has neither taken such a decision nor is there any justification for the discontinuation of Rs5,000 note”.

According to the estimates, Rs5,000 denomination notes of a total value of 1.02 trillion are in circulation.

The spokesperson of the Ministry of Finance elaborated the position that the current denomination of highest value notes in Pakistan that is Rs5,000 was significantly smaller compared to those of major currencies such as $100 note, Euro 200 and Pound Sterling 50.

During 2015-2016, only 17 per cent of the notes printed were of Rs5,000 denomination.

Given the continuing use of cash in transactions, government believes that discontinuation of Rs5,000 note would adversely affect the efficiency of exchange in the business and be a source of major discomfort and anxiety for the people.

As such the very notion of cancellation of such convenience in transactions is preposterous and unequivocally denied.

The government further states that it is pursuing a National Financial Inclusion Strategy in association with the State Bank whereby digital transactions and branchless banking is being brought to the doorstep of people that will significantly reduce the dependence on currency.

This is the way to move forward for promoting documentation in the economy rather than by cancelling any existing denomination.

“The government hopes people would not lend their ears to rumours and trust the authentic word of their elected government,” the statement concluded.

Meanwhile, Senate Standing Committee on Finance and Revenue Chairman Senator Saleem Mandviwalla has also clarified that the committee has not asked the government to withdraw the currency notes of Rs5,000 denomination.

“The business community and the people at large are panicked on the rumours of withdrawing Rs5,000 note after the Senate of Pakistan passed the resolution to withdraw Rs5,000 note in a phase-wise manner,” said Mandviwalla, who is also former finance minister.

He further said that the committee would deliberate on the resolution passed by the Senate and would summon the Ministry of Finance, the SBP and other relevant government departments’ officials to discuss the matter.

Mandviwalla said that there was no consideration on the demonetisation of Rs5,000 note at the moment right now, the business community and the people of Pakistan should not panic as the federal government or the State Bank of Pakistan (SBP) had not issued and approved any such directive in this regard.

Senator Mandviwalla clarified that there was no reality behind the false news. He said the government was neither going to ban currency notes of Rs5,000 nor had any plan to do so.

He said that withdrawing Rs5,000 note would impact the economy and had its own pros and cons; therefore any proposal would be approved after consulting all the stakeholders.