DCM Circular No. 01: Direct destruction of defective and non-circulating notes deposited in the vaults of Bangladesh Bank

20119

Bangladesh Bank (Central Bank of Bangladesh) Head Office Motijheel, Dhaka-1000 Bangladesh

Department of Currency Management (Issue Administration Branch)

Date: 03 Falgun, 1429 16 February, 2023

DCM Circular No.-01/2023

Managing Director / Chief Executive Officer All Scheduled Banks of Bangladesh

Dear Sir,

Regarding the direct destruction of defective and non-circulating notes deposited in the vaults of Bangladesh Bank.

1. Attention is drawn to DCM Circular No.-02 dated 11 January, 2018 on the subject mentioned above.

2. In order to ensure the circulation of clean notes in the market and with the aim of disposing of a large number of unverified notes, a decision has been taken to directly destroy defective and non-circulating notes valued between 2 and 50 Taka. In this regard, the following measures will be taken to carry out the direct destruction of defective and non-circulating notes in a proper manner:

a. If exchange-unfit notes are found during the verification of bundles of defective and non-circulating notes deposited as challan and deposit notes on a random sampling basis, the corresponding bank will be paid the amount payable according to the formula by determining the number of exchange-unfit notes and short-count notes in proportion to the total number of notes designated for destruction, and the account will be adjusted:

(Number of notes designated for destruction x Number of exchange-unfit and short-count notes found during random sampling verification x Value of the note) / Number of notes verified on a random sampling basis

Example: On a specific day, the quantity of defective/non-circulating notes valued at 50 Taka designated for direct destruction is 1,00,000 pieces. The quantity of notes to be verified on a 30% random sampling basis is 30,000 pieces. Among them, 5 pieces were found short and 5 pieces were found exchange-unfit, i.e., the total quantity of short and exchange-unfit notes is (5+5)=10 pieces. According to the aforementioned formula, the amount payable to your bank will be (1,00,0001050/30,000) = 1,666.67 Taka.

b. Defective and non-circulating notes designated for direct destruction will be separated individually at the rate of 1% for notes valued at 2 Taka, 5% for notes valued at 5 Taka, 10% for notes valued at 10 Taka, 20% for notes valued at 20 Taka, and 30% for notes valued at 50 Taka, and verified and examined according to the rules.

c. If the quantity of re-circulable notes among the separately sampled notes is 10 (ten) percent or more, a penalty of 1 (one) percent on the total value of the re-circulable notes obtained by examining and verifying all deposited notes will be collected.

d. In the case of direct note destruction, the instructions regarding the imposition of negative points for failure to sort notes properly according to DCM Circular No.-03 dated 21/05/2019 will not apply to the direct destruction of defective and non-circulating notes valued between 2 and 50 Taka.

3. In this regard, DCM Circular No.-02 issued on 11 January, 2018 is hereby repealed.

4. This directive is issued under the powers conferred by Section 45 of the Bank Company Act, 1991.

This directive will be effective immediately.

Yours faithfully,

(Signature)

(Md. Mokseduzzaman) Director (DCM) Phone: 9530090.

Phone: 88-02-9550848, 9554896, IP: 88-02-55685001-6, Fax: 88-02-9530479, www.bb.org.bd