Currency in circulation increased by Rs 263 billion: Senate informed

Dr Hafeez Sheikh, Minister for Finance told Senate on Tuesday that during FY11 the currency in circulation increased by Rs 263 billion as on February 15, 2011, showing a year-on-year growth of 19 percent.
In response to Senator S M Zafar's question about the amount/value of currency notes printed during 2009-10 and steps taken by the government to control inflation, the finance minister stated in a written reply that currency notes valuing Rs 153.750 billion were printed during FY10, resulting in reduction of financial intermediation.
The minister informed the house during the question hour that the issuance of currency notes also resulted in increased money circulation. He said the currency to deposit ratio has increased to 33 percent as on February 2011 from 29 percent at end June 2010. The prime reason for this increase was heavy government borrowings from the State Bank of Pakistan for budgetary support.
The government borrowing from the SBP essentially means printing of new money, which adds to inflation, he added. An understanding between the SBP and the government to restrict such borrowings at the end-September level of Rs 1290 billion will help in restraining the printing of new notes and to reduce the currency in circulation.
Meanwhile, in response to another question, the minister said that as many as 18 officers of BPS 16 to 19 of Customs Collectorate Karachi were facing disciplinary proceedings due to their alleged involvement in corruption cases. He said that two Deputy Collectors Imran Sajjad Bukhari and Javed Sarwar Sheikh and one Additional Collector of BPS-19 Syed Tanveer Ahmed and one Assistant Collector of BPs-17 Aamir Nawaz Hamid were involved in the cases of M/s Bawan Shah Group of Companies regarding issuance of fake/flying refunds.
Inquiries are under way against the officials, he added. He said the other officials included Deputy Collectors of BPS-18 Habib Ahmad Jawad Zafar Malik, Salra Khan, Muhammad Saqif Saeed and Nawabzadi Aliya Dilawar. The other officials were Principal Appraisers of BPS-16 Naimutullah Alvi, Shahid Hussain Rizvi, Qamaruddin Semajo, Irshad Khan, Syed Hamid Umar and Mehtab Ahmed.
The finance minister told the Senate that out of seven districts of Malakand Division bank loans of residents of four districts that included Malakand, Swat, Buner and Chitral have been written off under the Prime Minister's fiscal relief package of KP, Fata and Pata. He said the relief package was extended to only four districts and division in pursuance of the recommendations finalised in consultation with all stakeholders including the government of KP, chamber of commerce and industries of KP and the State Bank of Pakistan, the reply added.