India printed currency for Pakistan for one year after independence
After gaining independence from British colonial rule in 1947, India and Pakistan encountered several immediate challenges in their paths to nationhood. Unlike India, Pakistan lacked a functioning central banking system due to the partition. So, for nearly a year following independence, India extended a helping hand by supplying currency to Pakistan, bridging an important financial gap amid shared struggles and the redefinition of nationhoods.
Special committee was formed to look into matter
The partition brought complex challenges, requiring solutions for issues related to currency and coinage, management of exchange and public debt, transfer of staff and property, and division of profits, assets, and liabilities. The then-temporary government formed a special committee. This panel was responsible for looking into the administrative consequences of the partition and taking the necessary actions to transfer power to both new countries.
Temporarily, RBI provided currency to Pakistan
During that interim period, for nearly a year, the Reserve Bank of India (RBI) supplied currency to Pakistan and effectively functioned as its central bank until the establishment of the State Bank of Pakistan (SBP). This underscores the fact that Pakistan temporarily utilized Indian currency, featuring "Government of Pakistan" in English and "Hakumat-e-Pakistan" in Urdu on the notes' white space.
Monetary System and Reserve Bank Order 1947
Pakistan couldn't establish its own central bank right after the partition. So, India and Pakistan made an agreement called the "Monetary System and Reserve Bank Order 1947." According to this, the RBI would continue to act as the main banking authority for Pakistan until September 30, 1948. The Indian notes remained legal tender in Pakistan until the same date, starting from April 1, 1948.
1953 onward, State Bank of Pakistan took over note issuance
In June 1948, RBI stopped being Pakistan's central bank—a month before Pakistan established SBP. Pakistan's government issued its first notes in October 1948, with PKR 5, PKR 10, and Rs. PKR 100 denominations. Later, SBP took charge of issuing notes in 1953, introducing denominations of PKR 2, PKR 5, PKR 10, and PKR 100. However, Pakistan also produced PKR 1 notes until the 1980s.
