SBP replaces paisa with rupee

The National Assembly Standing Committee on Finance on Thursday approved the Pakistan Coinage Amendment Bill 2010 which replaces the paisa denominated coins with one rupee coin as the smallest unit. The approval brings to an end 105 years old system of calculating currency on paisa.
The state Bank of Pakistan (SBP) would exchange within six months Rs600 million worth paisa coins. One per cent of these coins would be preserved with SBP and in museums, the committee was informed. A committee chaired by Fouzia Wahab was told by Finance Secretary Waqar Masood that the decimal coins were no more relevant and have become out dated. He said that the coins of denominations of 1 rupee, 50 paisa, 25 paisa, 10 paisa etc were in circulation since 1906. SBP Deputy Governor Kamran Shahzad told the committee that on January 1, 1961, Pakistan introduced decimal Coinage System by launching coins of denominations of 10, 5, and 1 paisas and decimal coins of higher denominations of 50 and 25 paisas were put into circulation subsequently.
He said that as a result of increase in the inflationary rate and depreciation of Pakistan’s currency during last few years, coins of less than one rupee including decimal coins are no more transacted in daily life due to their negligible worth. Keeping in view the trend, SBP had already initiated the process to eliminate paisas from payments and receipts in bank’s transactions. This was done to minimize the inconvenience in the record keeping of transactions involving paisas.
The old coins have become the obstacle and lost their utility and acceptance he said. The Pakistan Mint has also requested for return of these old coins for recycling in order to save government resources utilized for the purchase of metal for minting of Rs1 and Rs2 coins. The committee was told that all the gold and silver coins issued under Pakistan Coinage Act on different occasions of national importance shall be legal tender in payment provided that the coin has not been defected and has not lost weight.