Regulatory Alerts2019-12-12
Instruction No. 001-GV-DSM/2019 on the Cessation of Payments with 2003-2004 Series Banknotes and New Distribution at BFM Counters
The Central Bank of Madagascar (Banky Foiben'i Madagasikara) issued Instruction No. 001-GV-DSM/2019 mandating the immediate cessation of payments using 2003/2004 series banknotes at commercial bank counters. The directive establishes a new mandatory distribution ratio for all counter withdrawals and ATM dispensing, prioritizing 2017 series notes across all denominations to improve currency quality and circulation. Commercial banks must strictly adhere to these new allocation percentages effective March 25, 2019, and report any supply constraints directly to the Currency Management Department.
BANKY FOIBEN'I MADAGASIKARA
DIRECTION OF CURRENCY MANAGEMENT
Antananarivo, 28 MARCH 2019
N° __________/19-DSM/TCC/SIG I - GL1- 0313-009544
FINAL RECIPIENT
COMMUNICATION SHEET
| Attachments | For minutes | For decision | For signature | For distribution | x | For information |
|---|
Subject: 2019 Payment Strategy
Reference: N/FC No. I-GL1-0119-002519 dated 24/01/2019 Instruction No. 001 – GV/DSM/2019 dated 25/03/2019
As part of the policy to improve the quality of banknotes in circulation and in application of the referenced instruction, each payment at BFM counters will be subject to the new distribution below starting Monday, March 25, 2019:
Distribution Rates for Payments at BFM Counters (% by Value)
| Denomination | Ar 20,000 | Ar 10,000 | Ar 5,000 | Ar 2,000 | Ar 1,000 | Ar 500 | Ar 200 | Ar 100 | TOTAL |
|---|---|---|---|---|---|---|---|---|---|
| Rate | 97% | 3% | 100% | ||||||
| 97% | 2% | 1% | 100% | ||||||
| 58.2% | 29.1% | 9.7% | 1.6% | 0.8% | 0.4% | 0.2% | 0.1% | 100% |
Distribution Rates for Payments at BFM Counters (% by Number)
| Denomination | Ar 20,000 | Ar 10,000 | Ar 5,000 | Ar 2,000 | Ar 1,000 | Ar 500 | Ar 200 | Ar 100 | TOTAL |
|---|---|---|---|---|---|---|---|---|---|
| Rate | 66% | 34% | 100% | ||||||
| 66% | 13% | 21% | 100% | ||||||
| 24.6% | 24.6% | 16.4% | 6.6% | 6.6% | 7.1% | 7.1% | 7.1% | 100% |
Accordingly, each BFM entity is requested to strictly adhere to this value distribution for any withdrawal request submitted by correspondents.
The DSM has already taken these parameters into account during the supply of unissued funds. Nevertheless, for any constraints encountered regarding this latter point, please contact them directly.
THE FIRST DEPUTY GOVERNOR, JULES THEODORE RAKOTONDRAMANGA
Recipients: - DCT
- All RTs
BANKY FOIBEN'I MADAGASIKARA
INSTRUCTION NO. 001 – GV/DSM/2019 ON THE CESSATION OF PAYMENTS WITH 2003/2004 SERIES BANKNOTES AND ON THE NEW DISTRIBUTION OF BANKNOTES AT BFM COUNTERS
The Governor of Banky Foiben'i Madagasikara,
Having regard to Law No. 95-030 of February 22, 1996 on the activity and supervision of credit institutions, as amended;
Having regard to Law No. 2016-004 of July 29, 2016, supplemented by Law No. 2016-057 of February 2, 2017 establishing the statutes of Banky Foiben'i Madagasikara;
Having regard to Decree No. 2014-1684 of October 29, 2014 appointing the Governor of the Central Bank of Madagascar;
Having regard to Decree No. 2017-400 of May 23, 2017 approving the issuance of a new range of banknotes in denominations of 100 Ariary, 200 Ariary, 500 Ariary, 1,000 Ariary, 2,000 Ariary, 5,000 Ariary, 10,000 Ariary, and 20,000 Ariary;
Having regard to Instruction No. 01 – GV/DSM/NG/2018 on the improvement of currency circulation;
HAS DECIDED:
Article 1: To ensure an equitable distribution of 2017 series banknotes having legal tender status in Madagascar and to meet public demand, commercial banks are required to distribute currency fairly across the national territory.
Article 2: Banknotes of the 2003/2004 series must no longer be used as a means of payment at commercial bank counters, effective immediately.
Furthermore, all commercial banks offering automated teller machine (ATM) services are requested to dispense exclusively 2017 series banknotes in denominations of 20,000 Ariary, 10,000 Ariary, and 5,000 Ariary, according to the distribution set out in the annex.
Article 3: In the same spirit of this balanced distribution of legal tender banknotes, a new distribution incorporating medium and low denominations is also established.
All withdrawal requests by banks at BFM counters will therefore be automatically redistributed by each BFM entity in accordance with the distribution set out in the annex.
Article 4: This instruction takes effect as of Monday, March 25, 2019.
Antananarivo, 25 MARCH 2019
THE GOVERNOR ALAIN H. RASOLOFONDRAIBE
ANNEX
(INSTRUCTION NO. 001 – GV/DSM/2019)
1- Distribution of Payments at Automated Teller Machines (ATMs)
Distribution Rates for Payments at ATMs
| Distribution | Ar 20,000 | Ar 10,000 | Ar 5,000 | TOTAL |
|---|---|---|---|---|
| % by value | 60% | 30% | 10% | 100% |
| % by number | 37.5% | 37.5% | 25.0% | 100% |
2- Distribution of Payments at BFM Counters
Distribution Rates for Payments at BFM Counters (% by Value)
| Denomination | Ar 20,000 | Ar 10,000 | Ar 5,000 | Ar 2,000 | Ar 1,000 | Ar 500 | Ar 200 | Ar 100 | TOTAL |
|---|---|---|---|---|---|---|---|---|---|
| Rate | 97% | 3% | 100% | ||||||
| 97% | 2% | 1% | 100% | ||||||
| 58.2% | 29.1% | 9.7% | 1.6% | 0.8% | 0.4% | 0.2% | 0.1% | 100% |
Distribution Rates for Payments at BFM Counters (% by Number)
| Denomination | Ar 20,000 | Ar 10,000 | Ar 5,000 | Ar 2,000 | Ar 1,000 | Ar 500 | Ar 200 | Ar 100 | TOTAL |
|---|---|---|---|---|---|---|---|---|---|
| Rate | 66% | 34% | 100% | ||||||
| 66% | 13% | 21% | 100% | ||||||
| 24.6% | 24.6% | 16.4% | 6.6% | 6.6% | 7.1% | 7.1% | 7.1% | 100% |