Banks to face action for refusing torn, soiled notes: BB

Bangladesh Bank (BB) has warned of regulatory action against banks that fail to accept and exchange torn, defective and soiled banknotes.

The central bank’s move comes as part of its efforts to improve cash circulation and public convenience.

In a circular issued yesterday, the BB said that despite earlier instructions, it had observed continued reluctance among some bank branches to accept damaged notes.

It said such non-compliance is disrupting smooth cash transactions in the market.

To address the issue, the BB has made it mandatory for all scheduled banks to open special counters and regularly accept torn and soiled notes, particularly small denominations such as Tk 5, Tk 10, Tk 20 and Tk 50, and provide their exchange value through fresh or recirculatable notes.

The BB said that any failure or unwillingness by bank branches to comply with the directive would invite action against the concerned banks.

The move is aimed at enforcing the Clean Note Policy and ensuring better quality of currency in circulation.

The instruction has been issued under Section 45 of the Bank Company Act, 1991, and has come into immediate effect.