BSP requires banks to accept unfit, damaged banknotes

By , on May 27, 2014

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MANILA — In response to rumors that banks will no longer accept unfit notes, a top official from the Bangko Sentral ng Pilipinas (BSP) assured that banks are still required to accept unfit or damaged banknotes.

BSP Circular No. 289 issued on March 13 states that “currency notes and coins considered unfit for circulation shall not be re-circulated, but may be presented for exchange to or deposited with any bank.”

Reiterating this mandate in a press conference yesterday, BSP 7 Director Atty. Maria Lux Berciles appealed to banks to accept unfit notes as part of BSP’s “clean note and coin policy.”

Unfit different from mutilated note

Berciles also noted the difference between an unfit and a mutilated currency note, stressing that only unfit notes are required to be accepted.

Mutilated banknotes are required to be presented not to the banks but to BSP office of the local banks.

Berciles also reminded that mutilated notes can no longer be replaced or redeemed as the notes will be transmitted to the BSP’s Currency and Investigation Integrity for further investigation.

After months of investigation, only then can a client who submitted a mutilated banknote be informed on whether or not the banknote is still redeemable.

Mutilated banknotes, on one hand, include those with torn parts and joined together by adhesive tape, and bills whose size became smaller because of exposure to insects, chemicals, and other causes.

Meanwhile, unfit notes are those banknotes that only sustained minor damage such as heavy creases that break paper fiber, indications of disintegration, badly soiled, contaminated or marked with writing, and those that “present a limp or rag-like appearance.”

With report from Katlene O. Cacho