Legal notice to government seeking cancellation of Tk 1,000 note

A legal notice has been sent to the government demanding the cancellation of the Tk 1,000 note to control inflation, prevent the spread of black money and increase transparency in transactions in the economy. At the same time a demand has also been made to take necessary measures to stop printing new money without adequate reserves or financial basis.

Supreme Court lawyer Md Mahmudul Hasan Mamun sent this notice in the public interest on Tuesday (September 22). The Cabinet Secretary, the Secretary of the Finance Division of the Finance Ministry and the Governor of Bangladesh Bank have been made the recipients of the notice. A demand has been made in the notice to take necessary legal and administrative steps on this matter within the next 15 days.

It has been claimed in the notice that additional money supply without adequate reserves or financial basis may create pressure on the purchasing power of the taka and inflation may also increase. For this reason it has been said to ensure proper reserves and financial management in the case of money supply. The notice giver has also linked the matter with the living expenses of the general public and the right to life and personal liberty recognised in Article 32 of the constitution.

In favour of cancelling the Tk 1,000 note it has been said in the notice that this high denomination note is comparatively less necessary in the daily transactions of the general public. The notice giver’s claim is that high denomination notes may be used to store a huge amount of cash outside the banking system and this creates the opportunity for the expansion of illegal money transactions and the shadow economy. However, these have been presented as the notice giver’s claims, not as the government’s acknowledged decision or proven economic results.

In this case the example of India’s withdrawal of the Rs 2,000 note has also been raised in the notice. According to the notice giver, cancelling the Tk 1,000 note in Bangladesh as well may create the opportunity to increase transparency in cash transactions and reduce the stock of black money. However, in India’s case the Reserve Bank of India had mentioned the withdrawal of the Rs 2,000 note in 2023 as part of the ‘Clean Note Policy’ and had kept the note still valid as currency while giving the opportunity for deposit or exchange in banks.

A demand has been made in the notice to take necessary steps within the next 15 days to stop printing new money without adequate reserves and to cancel the Tk 1,000 note. It has also been mentioned in the notice that if measures are not taken within the stipulated time a writ petition will be filed in the High Court in the public interest under Article 102 of the constitution.