New Guidelines Ensure Exchange of Torn or Damaged Banknotes

Bangladesh Bank has issued new guidelines for the exchange of worn, torn, or damaged currency notes, providing clarity for both banks and the public. Under the updated policy, customers whose banknotes are more than 90 per cent intact will receive the full face value immediately at any branch of any bank.

However, if a note has 90 per cent or less of its surface remaining, it cannot be exchanged on the spot. In such cases, customers must submit the note along with an application at a bank branch. The Bangladesh Bank will review the request and, subject to approval, return the equivalent value within a maximum of eight weeks. The new regulations were issued under the Currency Refund Regulations promulgated on 9 October, with the detailed policy coming into effect last Monday.

Universal Note Exchange Across All Branches

The guidelines emphasise that all bank branches must provide note exchange services, including for notes that are unfit for circulation, torn, damaged, or otherwise defective. Branches are instructed to forward applications to Bangladesh Bank when immediate exchange is not possible. Banks that fail to comply with the directive may face regulatory action, according to the circular.

Classification of Banknotes

The circular divides currency notes into five categories based on usability and condition:

Fit for Recirculation – Notes that remain in active circulation.

Unfit for Circulation – Notes that can no longer circulate but are exchangeable.

Torn, Damaged, or Defective Notes – Eligible for immediate or deferred exchange based on condition.

Claimable Notes – Notes with less than 90 per cent remaining or heavily soiled, requiring Bangladesh Bank review.

Burnt or Charred Notes – Must be submitted directly to Bangladesh Bank for assessment; no immediate exchange is possible.

For torn or damaged notes, if more than 90 per cent remains, banks are required to pay the full value immediately. Notes with 90 per cent or less remaining, or heavily soiled notes, are classified as claimable. Bangladesh Bank will evaluate these and communicate the approved amount to the respective branch within eight weeks. Burnt notes are assessed directly by the central bank.

Key Details – Torn or Damaged Note Exchange

The circular also instructs all banks to prominently display notices about services for exchanging damaged or claimable notes. Any attempt to submit counterfeit notes or pieced-together fragments will result in legal action under prevailing law. With these measures, Bangladesh Bank aims to simplify note exchange, protect customers’ interests, and ensure transparency in the handling of damaged currency.