Pakistan's federal cabinet has approved the introduction of a Rs10 coin to replace the existing Rs10 banknote, and has also approved the designs of a new series of currency notes. The decisions were taken at a cabinet meeting chaired by Prime Minister Shehbaz Sharif in Islamabad on Wednesday, 4 November, on the recommendation of the Ministry of Finance, according to a statement from the Prime Minister's Office.

The cabinet was given a detailed briefing on the new currency notes. Proposals for the designs had been sought from artists and designers across the country, and a cabinet committee set up by the prime minister had held consultations with stakeholders before the designs were put to the cabinet for approval.

Why the Rs10 note is being replaced

The State Bank of Pakistan had proposed withdrawing the Rs10 banknote because it costs a lot to produce relative to its value. The bank's Deputy Governor, Dr Inayat Hussain, told the Senate Standing Committee on Finance that manufacturing the Rs10 note was becoming expensive and that a coin could replace it.

Low-value notes wear out quickly in daily use, while coins last far longer, and several countries have replaced their smallest paper notes with coins for the same reason. The Rs10 note is the smallest paper denomination still in circulation in Pakistan.

New notes with stronger security features

The redesigned currency notes will carry stronger security features to make them harder to counterfeit, and will be printed on modern materials meant to lengthen their working life. The cabinet was told that the new series would cover the main denominations, with the approved designs including Rs50 and Rs100 notes.

Introducing the new notes into circulation is expected to take about a year, as the State Bank first needs to build up sufficient stocks before releasing them. No firm date has been announced for when the redesigned notes will reach the public.

No date yet for the note to stop being legal tender

The cabinet decision sets no date for the Rs10 banknote to stop being legal tender, and no exchange deadline has been announced. The Rs10 note therefore remains valid for now, and people can continue to use it as before.

The State Bank had already moved in September to calm speculation, denying reports on social media that the Rs10 note was being discontinued and that a deadline had been set for exchanging existing notes. The bank said that if any denomination were discontinued, the decision would be announced publicly and people would be given adequate time to exchange their notes.

A Rs10 coin is not entirely new in Pakistan. The State Bank issued a Rs10 coin on 24 October 2016, a yellow, round coin 25.5 millimetres across and weighing 5.50 grams, with the Faisal Mosque on the reverse. What the cabinet has now approved is the replacement of the paper note by a coin as the standard form of the denomination, alongside a wider redesign of the country's banknotes.

One report of the cabinet meeting differed, suggesting the note would be retained, but the Prime Minister's Office statement records the decision to introduce the coin. Until the State Bank sets a date, the practical advice for the public is simple: the Rs10 note still spends, and any change will be announced before it takes effect.