Banks required to accept unfit bills, BSP says-A A +A
Monday, May 26, 2014
BANKS are directed to accept unfit or damaged banknotes, a top official of the Bangko Sentral ng Pilipinas (BSP) 7 assured yesterday, in response to speculations that banks will no longer accept these notes.
BSP 7 Director Atty. Maria Lux Berciles, in a press conference, said that banks are mandated to accept unfit banknotes as part of the “clean note and coin pol icy” of the central bank.
Under BSP Circular No. 289, dated March 13, 2014, “currency notes and coins considered unfit for circulation shall not be re-circulated, but may be presented for exchange to or deposited with any bank.”
Berciles, however, made a distinction between an unfit and mutilated currency note.
A banknote that has sustained minor damage is considered unfit. It may contain heavy creases that break the fiber of the paper and indicate that disintegration has begun.
Or it may be badly soiled, contaminated or marked with writing, even if these “have proper life or sizing.” Unfit bills also include those that “present a limp or rag-like appearance.”
Mutilated banknotes, on the other hand, include those where torn parts of banknotes are joined together with adhesive tape; also included are bills that have become smaller because of wear and tear or exposure to “insects, chemicals or other causes.”
Notes are also considered mutilated when these have been burned or scorched so that these are too brittle to handle.
Clients with mutilated banknotes are advised to present these bills to the BSP office or the local banks. Berciles, however, clarified they will not be replacing or redeeming the mutilated banknotes, as these will be transmitted to the Currency and Investigation Integrity Office of the BSP for further investigation.
She said it takes a month to determine if the banknote could still be redeemable or not.
Juey Umerez, outgoing president of the Cebu Bankers Club, said they the association has issued an advisory to member-banks about the amended policies.
“We are assuring the public that your banks will certainly accept your unfit bills either for deposit or for exchange. If considered mutilated, it will be accepted. You will be issued a receipt and the bill will be forwarded to the BSP for further investigation. It will be replaced once determined redeemable,” said Umerez.
He also advised the vendors, tricycle drivers and establishments not to refuse unfit currency notes as mode of payments.
In 2013, about 1.055 billion notes were destroyed, lower by 11.6 percent from the number the year before.
About 586 million pieces or 55.5 percent were shredded through manual means using the BSP’s machine disintegrator, while the other half was retired online through the automated banknote processing machines.
Annually, the BSP issues about 2.2 billion banknotes in six denominations from its Quezon City Security Plant Complex. Before 2013, half of this volume was printed by foreign banknotes printers.
Last year, the BSP issued P852.1 billion or 24.26 billion pieces of currency notes and coins. Banknotes accounted for 97.1 percent or P827.1 billion while coins issued amounted to P24.96 billion.
Published in the Sun.Star Cebu newspaper on May 27, 2014.