Younis, 36, was awarded the 'B' grade under new categorisation rules set by the board's committee but chairman Najam Sethi stepped in today to rectify the situation and promote the veteran batsman to category 'A'.
It was the first instance that Younis was not placed in 'A' category since the contracts were started three years back, which led to widespread criticism of the decision and the board found to hard to justify its judgement.
A statement from the board said that Sethi has taken notice of the rules relating to Central Contracts of Players in which a renowned and star player like Younis Khan has been placed in Category 'B', and ordered a suitable amendment to rectify the situation.
"According to the new clause to be inserted into the rules, any player who has played over 300 matches in all three formats of the game, and has captained in all three formats will be placed in Category 'A'," the statement said.
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The statement also quoted Sethi as saying: "The Committee comprising Zakir Khan, Moin Khan and Mohammad Akram did a good job in framing the rules but it did not sufficiently address all issues, especially fitness and past performance, whereby a class player like Younis Khan was a fitting candidate for Category 'A'."
The batsman has now joined Test and ODI captain, Misbah-ul-Haq, Saeed Ajmal, Shahid Afridi, Muhammad Hafeez and Junaid Khan in the top category.
The top category in the central contracts carries a monthly retainer of 550,000 rupees ($5500) but sources close to Younis said his grouse was not over money but the fact that being a senior player he didn't deserve to be demoted in this manner.
Younis said recently he wanted to play in the World Cup 2015 and wanted to retire on his own terms gracefully.