Akhtar was banned by the PCB on Tuesday, a move that effectively ends his career after a series of disciplinary problems culminating in a public outburst against the board for not giving him a contract.
"We demand immediate retraction of allegations from Akhtar in various statements which were malicious and baseless," PCB chairman Nasim Ashraf told AFP.
"He must apologise and pay damages of 100 million rupees to the PCB and damages of 100 million rupees to me."
In a letter made public by the board, lawyers for PCB chairman Nasim Ashraf demanded the money for a "malicious and vile piece of defamation" allegedly made by Akhtar in a television interview on Wednesday.
In the interview with the Express News Channel, Akhtar alleged that Ashraf had "pressurised you for and tried to extort from you" payments from Akhtar's Indian Premier League contract, and that the five-year ban was a response to Akhtar's alleged refusal, the letter said.
Akhtar and several other Pakistan players have signed for the multi-billion dollar IPL, which starts from April 18.
The lawyers' letter said he should pay Ashraf 100 million rupees "for defaming him personally" and the same amount again "for sullying the name of the Pakistan Cricket Board and the Pakistan cricket team."
Ashraf said the ban on Akhtar had nothing to do with any personal confrontation with the fast bowler.
"It (the ban) is a matter between the PCB and Akhtar but the malicious, baseless and outrageous allegations he has levelled against me are mud-slinging and I will fight that myself," said Ashraf.