DCM Circular No. 04: Regarding payment/disposal of mutilated and claimable notes

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

Department of Currency Management (Issue Administration Branch)

Date: 15 December, 2025 30 Agrahayan, 1432

DCM Circular No.-04/2025

Managing Director/Chief Executive Officer All Scheduled Banks Operating in Bangladesh

Dear Sir,

Regarding the acceptance and payment/exchange value of mutilated/defective notes and claimable notes.

Reference is drawn to DCM Circular No.-02/2025 dated 09/10/2025 on the subject.

2. On 09/10/2025, Bangladesh Bank issued the Bangladesh Bank Note Refund Regulations, 2025, and the Bangladesh Bank (Note Refund) Regulations- 2012 were repealed.

3. In the interest of maintaining normal and orderly cash transactions for the general public, your bank branches must regularly provide services for the exchange value of dirty, mutilated/defective, and claimable notes in accordance with the regulations. Action will be taken against any bank branch found unwilling to provide such services.

4. In light of the Bangladesh Bank Note Refund Regulations, 2025 and considering timeliness, it is advised to follow the guidelines mentioned in this circular regarding the classification, characteristics, and procedures for notes.

5. Based on usability and characteristics, circulating notes are classified as follows: (a) Re-issuable notes; (b) Non-issuable notes; (c) Mutilated/defective notes; (d) Claimable notes; and (e) Charred notes. The characteristics of the above notes are described in detail in Appendix 'A'.

6. Full exchange value is payable at bank branches for Non-issuable and Mutilated/defective notes. In applicable cases, the following procedures must be followed:

(a) An authorized officer of the bank branch (at least a 1st Class officer for state-owned banks and equivalent rank for private banks) must ensure that the submitted note has sufficient security features to be identified as an original note beyond doubt and that more than 90% of the complete note is present.

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Phone: 88-02-9550448, 9554896, IP: 88-02-55665001-6, Fax: 88-02-9530499, Web: www.bb.org.bd

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(b) If the submitted note is torn into two pieces, the two pieces must undoubtedly be parts of the same note. In this case, during deposit, the reverse side of the separated pieces of the note should be joined with the narrowest possible size of light white paper so that there is no difficulty in identifying the original note during examination. For worn-out notes that are not torn into two pieces but may require careful examination by examiners, similar narrow light white paper should be attached to the reverse side as much as possible so that there is no difficulty in the examination required for identifying the original note.

7. The exchange value of Claimable notes is not payable at bank branches. The exchange value of such notes shall be payable upon receipt from Bangladesh Bank. The postage or courier charges for sending these notes to Bangladesh Bank for value collection shall be recovered from the depositor. The following procedures shall be followed for accepting claimable notes, sending them to Bangladesh Bank, and collecting their value:

(a) Bank branches shall accept claimable notes along with an application form (Form L-2) containing the note value, number, depositor's name, and full address. For notes that may be separated during examination, narrow light white paper should be attached to the reverse side as much as possible so that there is no difficulty in examining the note for identification as an original note. No paper shall be attached where any part of the note is missing.

(b) The accepted notes along with the depositor's application form (first part of Form L-2) shall be sent to the Executive Director (Currency)/Executive Director of the nearest office of Bangladesh Bank via the branch's forwarding letter by hand or by registered post/courier with an acknowledgment slip.

(c) The concerned office of Bangladesh Bank shall inform the decision regarding the payment of the note's value within 04 (four) weeks of receiving the application form, and if the value is payable, the value shall be credited to the concerned bank's account and an advice shall be sent.

(d) After receiving the claimable amount from Bangladesh Bank, the bank branch shall pay the claim value after obtaining the applicant's signature on the receipt acknowledgment (second part of Form L-2).

(e) After paying the claim value to the applicant, the receipt acknowledgment shall be sent to Bangladesh Bank, and the third part shall be kept at the branch. Additionally, a permanent register regarding this shall be maintained at the branch (retention period: 10 years).

8. The exchange value of Charred notes is not payable at bank branches. In this case, the applicant must contact the Help Desk/Claim Section of the nearest office of Bangladesh Bank directly and apply by filling out Form L-2.

9. In the case of presenting forged notes and Built-up notes formed by joining various parts of multiple notes, the Department of Currency Management and Payment Systems' Circular No.-Forgery: 1(Policy)/2007-191 dated 04/07/2007 shall be followed.

10. Every branch of the bank shall display a notice in a place easily visible to the general public stating 'Services for exchange of mutilated/defective and dirty notes and claimable notes are provided.' The notice shall mention that:

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• Notes with slight rust/color/oil/ink stains, torn/taped, perforated, and dirty notes, notes torn into two pieces (complete part of the note present), and notes where more than 90% of the note is present can be exchanged for full value at the counter.

• For notes where the present part is 90% or less of the total area of the note, damp notes, highly worn-out notes, notes distorted by excessive oil/color/ink/rust, etc., notes torn into more than two pieces, and distorted notes, the exchange value shall be payable upon receipt from Bangladesh Bank. The postage or courier charges for sending these notes to Bangladesh Bank for value collection shall be recovered from the depositor.

• Legal action will be taken against the presenter of forged notes or Built-up notes formed by joining various parts of multiple notes.

11. Information regarding the acceptance of non-issuable, mutilated/defective, and claimable notes by bank branches shall be monitored monthly from the concerned bank's Head Office/Principal Office.

12. Circular No.-Estt: 423(Policy)/2013-15 dated 14/01/2013 issued previously is hereby repealed.

Yours faithfully,

(Signature) 15.12.25

(K M Ibrahim) Director (DCM) Phone: 9530090

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Appendix 'A'

(a) Characteristics of Non-issuable notes: (i) Highly dirty notes; (ii) Notes with slight rust marks; (iii) Notes with slight color applied; (iv) Notes with excessive writing, multiple seals, excessive countersignatures/signatures, or marks; (v) Notes with slight oil/ink; (vi) Notes with slight tears/small perforations.

** For the reasons mentioned above, one or more security features of the note may be unclear/slightly impaired; however, there is no problem in verifying the characteristics of the original note.

(b) Characteristics of Mutilated/defective notes: (i) Torn/taped notes - notes with narrow tape/white paper attached to the back of the torn part along the complete length so that there is no problem in verifying the characteristics of the original note; (ii) Notes torn into two pieces - both torn parts are undoubtedly parts of the same note; (iii) Notes with large perforations - the amount/area of the perforation is less than 10% of the total area of the note; and (iv) Missing parts of the note - the measurement of the missing part/area is less than 10% of the total area of the note.

(c) Characteristics of Claimable notes: (i) The amount of the present part of the note is 90% or less of the total area of the note; (ii) Damp Note - any partially or completely wet/damp note that may easily tear during verification/sorting and/or may hinder the identification of the original note; (iii) Highly worn-out notes (notes whose security features are so unclear that they hinder the identification of the original note); (iv) Notes distorted by excessive oil/color/ink/rust, etc., which hinder the identification of the security features of the original note; (v) Notes torn into more than two pieces - all torn parts are undoubtedly parts of the same note; and (vi) Altered Note - notes where the note number/value/signature/guarantee clause/image/picture has been changed/modified/distorted by writing/drawing or joining/separating.

(d) Characteristics of Charred notes: (i) Notes burnt or scorched by fire.

(e) Characteristics of Re-issuable notes: All notes other than those described above (non-issuable, mutilated/defective, claimable, and charred) that are suitable for re-circulation shall be considered re-issuable notes.

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Appendix 'B'

(31132) Bangladesh Bank Issue Department

Form L-2 (Paragraphs 69, 226, and 233) Book No. .................... (20... 20......) Application for Exchange Value of Claimable Note(s)

To Executive Director (Currency)/Executive Director Bangladesh Bank ................ Office .................

Sir, I/We request the payment of the exchange value for the following claimable note(s) presented at the counter/sent via Money Order.

Value	Quantity	Total Value
1/-
2/-
5/-
10/-
20/-
50/-
100/-
200/-
500/-
1000/-
Total

Yours faithfully

Signature .................................... Name ........................................ Address .................................... ............................................ Date ..................................... Mobile No. .............................. E-mail (if any) ....................

No. L-2 Book No. (I.R. No.) Second Part (20... 20......) Receipt Acknowledgment

I/We acknowledge receipt of Taka ------------------------------------------------------------------- (Taka ------------------------------------------------------------------- only) out of the total claimable amount of ---------------------------------------------------------------------(Taka ------------------------------------------------------------------- only) from the Executive Director (Currency)/Executive Director.

Date: -------------------------------------------------------------------- Signature of Recipient

Third Part No. L-2 Book No. (20... 20......) From ------------------------------------------------------------------- Name------------------------------------------------------------------------------------------------Address---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------- received ------------------------------------------------------------------- Claimable Notes totaling ------------------------------------------------------------------- pieces in total, amounting to Taka--------------------------------------------------------------------- (Taka ------------------------------------------------------------------- only) in consideration of the claim dated -------------------------------------------------------------------.

Signature, Name, and Seal of Receiving Officer