The SBP Decides to Issue New Design’s Banknote

The State Bank of Pakistan (SBP) plans to introduce new banknote designs with cutting-edge international security features by March 2024. The move aims to prevent the circulation of counterfeit money and boost the credibility of the country’s currency. 

What is the driving force behind the news?

The SBP governor, Jameel Ahmed, stated that the new banknotes will have unique serial numbers, new designs, and advanced security features. That will make them difficult to replicate or counterfeit.

He assured that the transition to the new currency would be smooth and would not disrupt the public’s normal financial transactions.

The potential withdrawal of high-denomination notes in Pakistan’s cash-strapped economy, particularly the Rs 5,000 note, is still a source of heated debate. Some financial analysts speculate that the introduction of new notes may lead to the demonetization of the Rs 5,000 note, as a strategy to combat counterfeit and illicit money markets. The governor denied denomination reports, stating that the new currency would be introduced gradually.

What are they expressing?

The SBP’s initiative is a reaction to the growing concerns regarding the circulation of counterfeit currency in Pakistan. This is a major threat to the integrity and stability of the financial system. The International Monetary Fund (IMF) has reported that Pakistan is among the top 10 nations with the highest ratio of currency in circulation to GDP. This suggests a sizable informal economy and a low tax base. 

Although the introduction of the new banknotes with improved security features has been welcomed by some financial experts. They have also advised against making snap decisions about what will happen to high-denomination notes like the Rs 5,000 note, which are frequently used for illegal activities and tax evasion. 

Statement of CEO of Financial Advisory Firm

According to Khurram Shehzad, CEO of the financial advisory firm Alpha Beta Core, the SBP must take additional steps to control the flow of large currency notes because issuing new banknotes will not address the issue of unaccounted money on its own. He recommended that the SBP think about limiting the number of high-denomination notes available or setting restrictions on how often they can be used.

Shehzad also emphasized the currency update’s economic ramifications and the need for the SBP to carefully control currency note printing to combat inflation, which is the primary driver of the demand for cash. He stated that as the currency update develops, the public and the international community will closely monitor the SBP’s strategy for preserving economic stability. 

Statement of MD of the Capital Investment Division

Sohail Farooq, MD of Capital Investment Division acknowledged the move as a positive step toward maintaining the integrity of Pakistan’s financial system, but it remains to be seen whether it will include demonetization. He also acknowledged the central bank’s growing concern about the proliferation of counterfeit notes in the market.

“Introducing new currency notes will not only ensure the reliability of money in circulation, but it will also boost business confidence,” he said.

Why does it matter?

The value and accessibility of money, people’s purchasing power, tax revenue, and the transparency of the financial system are all anticipated to be significantly impacted by the currency update in Pakistan.  

With images of historical sites, cultural icons, and national heroes, the new banknotes will also represent Pakistan’s identity and culture. 

The State Bank of Pakistan (SBP) is optimistic that the introduction of new banknotes will boost public confidence in both the currency and the central bank. Thereby fostering the nation’s economic progress and development.

What happens next?

The SBP has stated that the new banknotes will adhere to international standards and best practices, but it has not yet disclosed the specifics of its design or security features. Additionally, the SBP has guaranteed that the new banknotes will work with the current cash registers and counting apparatuses. 

To educate the public about the characteristics and advantages of the new banknotes as well as provide instructions on how to switch out their old banknotes for the new ones. The SBP will shortly begin a public awareness campaign. 

To guarantee the efficient and safe distribution and circulation of the new banknotes, as well as to stop and identify any attempts at fraud or counterfeiting. The SBP will also collaborate with law enforcement and the banking industry.

SBP New Banknote Design Art Competition 2024

All participants are encouraged to apply to the State Bank of Pakistan’s new Note Design Competition for 2024.

The new note design competition will showcase innovative designs and ideas from skilled artists and designers for the creation of new currency notes.

Deadline for SBP’s New Banknote Design Art Competition 2024

All applicants are advised to submit their banknote designs for Rs 10, 20, 50, 100, 500, 1000, and Rs 5000 to the aforementioned authority.

The State Bank of Pakistan’s new note design competition has until March 11, 2024, to submit entries.

How to Apply to SBP’s New Banknote Design Art Competition 2024 

You can apply for the SBP Art Competition for New Bank Notes online by clicking here.

1. All participants can select their preferred bank note and submit their novel designs for the existing currency of Rs 10 to Rs 5,000 based on their preference.
2. Each design must be submitted in hard copy to the above-mentioned authority, along with a brief description of the note to clarify its theme.
3. Each note should have different colors so that they can be easily distinguished.
4. A team of skilled and renowned artists and designers will then submit the top six designs to the State Bank of Pakistan for each note.
5. The SBP will choose the top three designs for each note. 
6. The first-place winner will receive a prize of Rs 1,000,000, the runner-up will receive Rs 500,000, and the third-place winner will be awarded Rs 300,000.
7. All participants must ensure that their designs are not copyrighted or infringed upon and that they do not contain any registered trademarks.
8. Following selection, the designs will become the sole property of SBP for modification or use.

Once the State Bank has chosen the designs, they will be sent to reputable bank officials for final approval following a competitive process.

Prizes for the New Banknote Design Art Competition, SBP 2024

First Prize – Rs 1,000,000/-

Second Prize – Rs 500,000/-

Third Prize – Rs 300,000/-

Eligibility Criteria for the New Banknote Design Art Competition, SBP 2024

The SBP is accepting applications for its new banknote design competition from all employees, recent graduates, and students alike.

Nevertheless, the SBP, its subsidiary employees, and their families, as well as the members of the jury, are not permitted to apply for this art competition.

The new currency will be printed after the winners of the State Bank of Pakistan’s New Note Design Art Competition have been chosen. The old currency will not be barred immediately, and a smooth transition will occur once a sufficient number of new currency notes are in circulation. 

Conclusion

The State Bank of Pakistan (SBP) has undoubtedly announced the change in banknotes, but the new images of the banknotes being shared on social media platforms are fake, created with the assistance of AI, and people are being misled by sharing. 

The Startup Pakistans team welcomes the SBP’s latest decision regarding the new banknotes and hopes that the new decision will be insightful for Pakistanis.

Author

This article is written and researched by Mujeeb UR Rehman, a Certified Marketing and Communications Professional from IBMI Berlin, Germany.