The Bangladesh Bank (BB) has directed all scheduled banks to ensure smooth services for exchanging torn, defective, and soiled notes, warning of stern action against those reluctant to comply.
According to a circular issued on Monday, scheduled bank branches must provide exchange value for non-issuable and mutilated notes if more than 90 per cent of the note is intact and genuine security features are present.
Notes divided into two parts must be attached to thin white paper to facilitate identification, the central bank said in the circular addressed to managing directors (MDs) and chief executive officers (CEOs) of all scheduled banks operating in Bangladesh.
Torn notes that have not split into two pieces but may break apart during examination should also be joined on the reverse side with light white paper for verification as genuine notes. The authorised officer at the branch will ensure that the presented note has sufficient security features to be identified beyond doubt as genuine.
"In order to continue normal and smooth cash transactions of the public, your bank branches must provide exchange value for torn/defective and soiled notes and provide services related to demandable notes regularly as per the rules," reads the BB circular.
"If any bank branches are found reluctant to provide such services, action will be taken against the concerned banks," it added. The BB has also classified banknotes into re-issuable notes, non-issuable notes, torn/mutilated notes, claimable notes, and charred notes.
However, claimable notes will not be settled at branch level; instead, banks must forward them to the nearest central bank offices. The payment decision will be made by the concerned central bank office within eight weeks of receiving the application. Postal or courier charges for sending claimable notes will be borne by the depositor.
Charred notes must be submitted directly to the central bank's claims desk. Counterfeit notes or reconstructed notes created from multiple fragments will invite legal action under existing regulations.
Bank branches have been instructed to display notices informing customers that services for exchanging torn, defective, and claimable notes are available. Monthly reports on receipt of such notes must be submitted to the central bank to ensure transparency and accountability in cash transactions. Earlier, the central bank instructed banks to accept mutilated notes and coins, but many branches were reluctant to accept coins, torn, or mutilated notes from clients and provide the equivalent amount.
The latest circular comes a month after the BB suspended several public services at its offices, including the sale of savings certificates and prize bonds, the exchange of torn or mutilated notes, and all related e-Challan services, citing security and alignment with international central banking practices.
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