Former Chairman Federal Board of Revenue (FBR) Syed Shabbar Zaidi has called for the demonetization of Rs 5,000 note to boost the economy.

Zaidi, the former chairman of Pakistan tax collecting authority, in a statement released on Twitter, suggested that the government should demonetize the Rs5,000 note from July 1, 2021 and notify the change two months in advance.

Shabbar Zaidi said that those who oppose the move have no idea of its misuse, it will destroy their interests. The former chairman said it would improve the economy and stabilize banking while making bribery more difficult.

It is pertinent to mention, similar measures were taken by the neighboring Indian government of Narendra Modi back in 2016. In order to reduce the use of illicit and counterfeit cash to fund illegal activity and terrorism, the Indian government announced the demonetisation of all INR 500 and INR 1,000 banknotes. It also announced the issuance of new INR 500 and INR 2,000 banknotes in exchange for the demonetized banknotes.

The announcement of demonetisation was followed by prolonged cash shortages in the weeks that followed, which created significant disruption throughout the economy.

However, as per a 2018 report from the Reserve Bank of India, approximately 99.3pc of the demonetised banknotes, or that had been demonetised, were deposited with the banking system. But the banknotes worth INR 107.2 billion were not deposited, which lead to many analysts state that the effort by the Indian government had failed to remove black money from the economy.

Back in 2019, the State Bank of Pakistan (SBP) strongly denied the reports that there is a proposal to dicontinue Rs. 5000 currency note111.