ISLAMABAD: The federal cabinet is expected to order inclusion of 61 food and non-food items for mandatory certification list and temporarily suspend the varnish coating of existing banknotes for a couple of months due to coronavirus.

To be presided over by Prime Minister Imran Khan, the meeting is also expected to approve appointment of Naveed Asghar as member finance of the Water and Power Development Authority (Wapda). Mr Asghar is currently working for Wapda as general manager, finance power.

Informed sources said that the Ministry of Science and Technology had moved a summary to the federal cabinet for inclusion of 61 food and non-food items in the Compulsory Certification Mark Scheme of Pakistan Standards and Quality Certification Authority (PSQCA). Under the scheme, the products once included in the list could not be sold in the market without the PSQCA mark.

The cabinet will also take up a summary of the Ministry of Finance on the request of the State Bank of Pakistan to give up for about two months the varnish coating of banknotes.

The summary seen by Dawn says the SBP is mandated under Section 24 of the SBP Act of 1956 for issuing banknotes. At present, it is issuing banknotes of Rs10, Rs20, Rs50, Rs100, Rs500, Rs1,000 and Rs5,000 denominations.

The SBP has in collaboration with the Pakistan Security Printing Corporation (PSPC), Security Papers Limited (SPL) and SICPA Inks Pakistan conducted a comprehensive exercise to explore various options for enhancing the security features of banknotes of higher denominations i.e. Rs500, Rs1,000 and Rs5,000.

Based on analysis of various security features being used globally, conducted during that exercise, the SBP with the approval of the federal government introduced four new features for strengthening and enhancing of the higher denomination banknotes. These included increase in the size of Optical Variable Ink (OVI) design by 10 per cent, Protective Varnishing using SICPAPROTECT ®, application of SICPATALK (CBA) ® infrared ink and application of colored magnetic ink NEOMAG ® as enhanced machine-readable feature.

The banknotes with these enhanced security features went into circulation in 2017. The rationale for introducing protective varnishing through SICPAPROTECT was to increase the life and longevity of banknotes. The PSPC is using just one machine for varnishing which has hitherto been sufficient to meet SBP indent, the summary noted.

However, the recent outbreak of Covid-19 has highlighted a new risk i.e. breakdown of the machine and non-availability of spare parts could severely disrupt the production of the banknotes with this specific security feature.

The varnishing security features only enhance the life of the banknote as confirmed by the PSPC Lab. Thus, doing away with this feature will not adversely impact the overall integrity of banknotes, though the life of banknotes may become shorter. Therefore, in the prevailing situation, reliance on single machine may be a more risky proposition as compared to the risk of doing away with varnishing of banknotes for a temporary period, the SBP argued.

The issue was discussed at the SBP board in its meeting held on March 26, which recommended temporary suspension of the varnishing of higher denomination banknotes — Rs500, Rs1,000 and Rs5,000 — for a period of two months with the approval of the federal government under Section 27 of the SBP Act, 1956.

Published in Dawn, May 5th, 2020