NRB issues 'clean note' diktat

KATHMANDU:

Nepal Rastra Bank (NRB) — the central monetary authority — has instructed banks and financial institutions to strictly enforce ‘clean note’ policy, which bars banking institutions from circulating bank notes that are not fit for use.

In a circular issued today, NRB has said that it had to take the step following public complaints that banking institutions were widely circulating worn out and torn notes replete with staple holes.

“From now on banks and financial institutions will have to scan bank notes that are fit for circulation and those that are not,” says the circular, making reference to notices issued in August and October 2010, during which similar instructions were issued.

The bundle of bank notes fit for circulation should contain a white slip, which should mention the name of the bank or financial institution, name of the staff who counted the notes, signature of the staff and company stamp. “The clean notes should be bundled using rubber or plastic bands, and in case staplers have to be used no more than one stapler pin should be used to hold together the notes,” says the circular.

Notes that are not fit for circulation, on the other hand, should contain a red slip, which should mention name of bank or financial institution, name of staff who counted the notes, signature of the staff and company stamp. “Banks and financial institutions should make an arrangement to send notes not fit for circulation to NRB,” says the circular.

NRB spends millions of rupees to print notes and mint coins every year. Last fiscal alone, the central bank spent Rs 593.2 million to print notes of various denominations and Rs 101.6 million to mint coins.

Because so much is spent on note printing and minting of coins, the central bank usually asks people to be careful while storing and using notes so that taxpayers’ money is not unnecessarily spent. Yet, lots of notes have to be dumped every year.

Last fiscal, NRB lit fire to bank notes worth Rs 26.96 billion of various denominations, as they were used beyond repair and no longer fit for circulation.

With the destruction of this lot, the central monetary authority has got rid of bank notes worth Rs 249.44 billion till mid-July, shows the annual report of NRB for fiscal 2012-13, launched in December.

NRB regularly destroys bank notes that are worn out and used beyond repair. Fire is lit on these notes to ensure they do not make their way back to the market again.

Source: THT