Sunday, July 16, 2023

Technical/Legal error in Rs. 75 banknote issued on Pakistan's 75th anniversary.

Keeping in mind that a currency note despite of how fancy it is designed is just a piece of paper and is only valuable/legal by the presence of the promissory phrase endorsed by the Government. The promissory phrase must be clear and concise stating the AMOUNT to be paid to bearer on demand with a guarantee from the Government. 
 
This has been in the practice since British Raj in the subcontinent and all the banknotes issued by the Reserve Bank of India contain this promissory phrase. Note that the most important part of the phrase is the AMOUNT which will be paid to the bearer on demand by presenting this note. To make the AMOUNT prominent the AMOUNT is written in larger and bolder font.

As we all know that State Bank of Pakistan (SBP) is the only authority that under the guarantee of Govt. of Pakistan issues banknotes of various denominations. The SBP also followed the rule and every note issued by them contains this promissory phrase in Urdu with the emphasis on AMOUNT of the banknote.

The promissory phrase translates to “State Bank of Pakistan will give the AMOUNT (mentioned in rupees according to the note) on demand to the bearer of this note and the note is issued under the guarantee of Government of Pakistan”.

The banknote of Rs. 75 which was issued on Pakistan's 75th anniversary in September 2022 also contains the promissory phrase but without the AMOUNT. The phrase without the amount translates to  "State Bank of Pakistan will give on demand to the bearer of this note issued under the guarantee of Govt. of Pakistan".

As the AMOUNT is missing, the phrase doesn’t make any sense and is legally incorrect, which makes the banknote of no value, and hence the banknote should be demonetized.

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