CBL Directive on Deposits of Banknotes

CENTRAL BANK OF LIBERIA OFFICE OF THE EXECUTIVE GOVERNOR DIRECTIVEoNDEPOSITSoFBANKNoTES DIRECTM NO. CBL / E-GOV/DLR/ 002 / 2026 EG 0012456 June 212026 L.0 Purpose This Directive is issued to pfomote the efficient and effective maflagement of both Liberian do[ar 6I.RD) and united States donar (usD) currencies,.rrith specific emphasis on the handling ,.rd d.porit of Liberian Dollar Banknotes Series 3 GS3)' It establishes mandatory requiremeflts governing: .ThesegregationofmutesanddepositofLS3banknotes; . The prohibition of commingling LS1 and LS2 (egacy banknotes) with LS3; . The identification and handling of counterfeit banknotes (LRD and USD); and . The acc1lf^cy of cash under Subject-To-Count Agreement in daily deposits submitted by licensed commercial banks' Additionally, this Ditective provides guidance on the withdrawal and controlled processing of legacy banknotes Q.St and LS2) through the central Bank of Libeda (cBL). 2.0 LegalAuthoritY This Directive is issued pursuant to the central Bank of Liberia Act, including' but not limited to, Section 68, which empovrefs the cBL to promulgate regulations and impose sanctions for non-compliance *i h -ot, etary and supervisory requirements' compliance with this Directive is mandatory fot alllicensed commetcial banks'

3.0 Obligations of Licensed Financial Institutions 3.L Segregation of Unfit, Counterfeit, and Legacy Banknotes A11 licensed commercial banks shall: a) Accuratelyidentify and segregate counterfeit and legacy (LS1 and LS2) banknotes from fit banknotes. b) Ensure that counterfeit banknotes are never recirculated or disbursed to customers under any circumstances. .) Guarantee the accuracy, completeness, and integriq of all deposits submitted to CBL. d) Maintain robust internai controls and procedures to prevent the recirculation of counterfeit, unfit and legacy banknotes. 3.2 Prohibition on Acceptance of Legacy Banknotes a) Commercial banks shall have ceased to accept legacy banknotes (LS1 and LS2) from customers effective December 31,,2024 which is the official termination date of their legal tender status. b) Customers holding legacy banknotes shall be directed to the Central Bank of Liberia for exchange. .) All exchanges of legacy banknotes shall be conducted exclusively at the CBL Head Office under a structuted process, including proper documentation of customer identification and transaction details in accordance with established procedures. d) Under no circumstances shall commercial banks include legacy or counterfeit banknotes in daily deposits submitted to the CBL. 4.0 Sanctions and Penalties Non-compliance with this Directive shail constitute a regulatory violation and shall atff^ct penalties in accordance with the categories specified below.

4.L Penalty Structure S/N Category of Violation (LRD & usD) 1 Shortages 2 Commingling of Legacy Banknotes with LS3 3 Commingling of Counterfeit Banknotes (i.e. USD & LRD) with Genuine LS3 or USD Banknotes Penalty Two (2) times the value of the shortage Three (3) times the value of the commingled banknotes . Four (4) times the value on first violation . Six (6) times the value for repeated violations (more than three occurrences) The CBL reserves the right to impose enhanced penalties where warcanted by the severity or frequency of violations. 4.2. Additional me asure s : . The CBL may conduct a spot examination or investigation at the institution where repeated violations occur (e.g., weak operational controls, inadequate counterfeit detection systems). 4.3. Reporting Requirement: a) All commercial banks are required to submit formal reports to the CBL detailing all counterfeit detections identified during cash processing activities. b) Submit documentary evidence of compliance measures to the CBL within one (1) month from the effective date of fiis Directive. 5.0 Compliance, Enforcement, and Effective Date This Directive shall take immediate effect upon issuance and shall remain in force until otherwise advised by the Central Bank of Liberia.

All licensed commercial banks are required to: t) Ensure fuIl internal dissemination of this Directive to all relevant personnel, including cashiers, teliers, vault custodians, and cash management staff. d) E'stablish and implement appropriate compliance procedures to ensure proper handling, segregation, and reporting of banknotes. t) Commetcial banks shall be r..porrible for putting in place the necessary system and processes, including relevant equipment to ensure compliance with this directive. 6.0 Contact Information For clarification or further guidance, please contact: The Banking Department Central Bank of Liberia Executive Govemor Central Bank of Liberia