Regulatory Alerts2016-10-25
Banking Circular No 6 of 2009 - Improvement of Currency operations
The Bank of Uganda has set out specific penalties for various instances where commercial banks violate the provisions related to cash handling and transportation. Here is a summary of the key points: 1. Loss of banknotes or coins in transit - Shs 20,000 per consignment/deposit if less than two pieces are lost; making good the shortage twice the face value of the total number of missing pieces. 2. Shortage in notes or coins deposited at the Bank (maximum tolerance: up to two pieces for each denomination) - No penalty if two pieces or fewer per deposit. If more than two pieces are short, penalties apply according to the table below: 3. Counterfeit notes detected in deposits - Penalties depend on whether they are coins or notes; either 5 times the face value of the counterfeit items or Shs 10,000 per consignment/deposit for coins, and 5 to 100 times the face value of the counterfeit items depending on the denomination for banknotes. 4. Detection of unfit notes in fit notes or mutilated notes - Penalties depend on whether they are coins or notes; Shs 20,000 per consignment/deposit for improperly sorted bundles containing up to 500 items; Shs 100,000 for 501 and more improperly sorted bundles. 5. Mix-up in denomination or mislabeling of packages - Shs 5,000 per deposit. 6. Torn coin bags or unpackaged bundles - Shs 5,000 per deposit. 7. Shortage/excess in number of bundles delivered for deposit - Shs 50,000 per consignment/deposit; penalties will be levied if there are three instances of penalty within a month.
BANKI KUU YA KENYA CENTRAL BANK OF KENYA Haile Selassie Avenue P. O. Box 60000 - 00200 Nairobi Kenya Telephone: 2860000 Telex: 22324 BANKING CIRCULAR NO. 6 2009
To: All Chief Executives Of Commercial Banks Improvement Of Currency Operations
In light of our continuous efforts to improve currency operations, we wish to notify all banks of the following :- l . Improvement in Handling of Counterfeit Notes In order to curb any circulation of counterfeit currency, all commercial banks are required to confiscate counterfeit currency and immediately stamp the back of the notes as below indicating the given details.
| COUNTERFEIT NOTE |
|---|
| Date confiscated ......................... |
| Bank & Branch.......................... |
| Depositor's name......................... |
| Teller's Name……………………… |
All confiscated counterfeits should be surrendered to Central Bank of Kenya, promptly.
- Penalties for Non-compliance with Sorting Guidelines and set timelines.
The following penalties will be levied with effect from 18 October, 2009 for non
| No. | NATURE OF SUBVENTION | PENALTY | |
|---|---|---|---|
| 1. | Late submission of letter of intent to | Kshs 20,000 | |
| withdraw/deposit (i.e. after 2pm) | |||
| 2. | Showing up late to withdraw/deposit cash ( | Kshs 20,000 | |
| i.e. after 2 p.m.) | |||
| 3. | Failure to cancel in time intention to | · Where cancellation is received before | |
| deposit/withdraw after submission of letter | 4.00p.m .- No penalty. | ||
| of intent. | - Cancellation | after | 4.00p.m. |
| Kshs.20,000 | l |
compliance with set standards:-
| 4. | Shortages in coins (maximum tolerance level ten pieces per deposit) | |||||
|---|---|---|---|---|---|---|
| · Coins of all denominations: 5cts to shs.40 | . | Ten pieces and below per each deposit - | ||||
| make good the shortage only. | ||||||
| · More than ten pieces per each deposit - | ||||||
| two times the face value of the total | ||||||
| number of pieces short in addition to | ||||||
| making good the shortage. | ||||||
| Shortage in notes (maximum tolerance two pieces per deposit) | ||||||
| 5. | . | |||||
| - Notes of all denominations: Shs. 50 to | Two pieces and below per each deposit | |||||
| Shs. 1000 | - make good the shortage only. | |||||
| . | More than two pieces per each deposit - | |||||
| two times the face value of the total | ||||||
| number of pieces short besides making | ||||||
| good the shortage. | ||||||
| 6. | Counterfeit notes detected in deposits (maximum tolerance level - NIL) | |||||
| · Coins all denominations: 5 cts to shs.40 | . | 5 times face value besides making good | ||||
| the shortage. | ||||||
| · Notes of all denominations; shs.50 to | . | 5 times of face value besides making | ||||
| shs. 1000 | good the shortage. | |||||
| 7. | · Detection of unfit notes in fit notes or fit | . | 1 to 500 improperly sorted bundles - | |||
| notes in unfit notes or mutilated notes | per consignment/deposit. | |||||
| shs. 10,000 | ||||||
| that do not meet criteria for exchange | · 501 and above improperly sorted bundles | |||||
| ksh.20,000 per consignment/deposit. | ||||||
| 8. | Shs.5,000 per deposit. This may | |||||
| · Mix up in denomination | labels | and | . | in | ||
| packages | addition lead | to rejection | of | the | ||
| consignment/deposit. | ||||||
| 9. | . | Torn coin bags and torn translucent | . | Shs. 5,000 per deposit. This may in | ||
| polythene packets or unpackaged bundles | addition, | lead | to rejection | of | the | |
| consignment/deposit. | ||||||
| 10. | · Shortage/excess in number of bundles | . | Shs. 50,000 per consignment/deposit. | |||
| delivered for deposit | ||||||
| 11. | · Three | instances of penalty | for | any | . | Caution will be issued to the affected |
| commercial | bank | violating | sorting | bank following which a penalty of not | ||
| guidelines in a month | less than kshs.100,000 per month will be | |||||
| levied. | ||||||
| The above penalties will be charged to the affected commercial bank's clearing account directly. |
myel JAMES P. LOPOYETUM DIRECTOR CURRENCY OPERATIONS & BRANCH ADMINISTRATION DEPARTMENT