Torn banknotes are the most common currency brought in for exchange

AS with every Chinese New Year, many who are celebrating it will receive the gift of money from loved ones – be it in the form of e-angpows or traditional red packets.

For physical angpows, many still pack new notes into such auspicious envelopes but it’s also become common to give used notes.

With more cash being circulated, it would be helpful for all to know more about fit or unfit currency.

Unfit currency are banknotes or coins that have characteristics that make it unsuitable to be circulated.

Examples of unfit currency are torn banknotes or ones that are badly smeared, especially around the portrait of the Yang di-Pertuan Agong, says Bank Negara Malaysia (BNM).

“The most common unfit currency brought in for exchange by the public are torn banknotes (85%) while the balance are notes (15%) damaged by fire or destroyed by termites,” the central bank tells Sunday Star.

BNM removes unfit banknotes regularly through currency processing by its Automated Cash Centres and five BNM offices nationwide.

“BNM processes up to three billion used banknotes annually (that return to BNM through the banking system from the general public), out of which about 20% are removed and destroyed for being unfit for recirculation,” it adds.The remaining 80% are fit banknotes that meet quality standards and will be put back into circulation.Malaysians in general are aware of the difference between fit and unfit currency.

“BNM normally issues or revises currency guidelines as and when there is a need to improve public understanding on our currency, especially how best to handle it.

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“Such guidelines will promote proper handling of currency to maintain good quality and longer lifespan,” it says.

The public can refer to the guidelines by logging on to https://www.bnm.gov.my/proper-handling-of-banknotes

With the recent severe floods that hit various parts of Malaysia, some individuals and businesses may have currencies that have been damaged from the disaster.

To this, BNM urges the public with damaged banknotes to go to the nearest bank to exchange them for fit currencies.

The latest guideline on the exchange of damaged banknotes can be read at https://www.bnm.gov.my/documents/20124/39730/pd_defaced+currency_dec2020.pdf

For banknotes which have been torn or defaced, the exchange value depends on the condition of the note.

If a torn banknote is more than two-thirds of its original size, it can still be exchanged for its full value.

Half value can be given for a torn banknote that is more than half but less than two-thirds of its original size.

However, if a banknote is less than half of the original banknote’s size, it bears no exchange value.

Notes with major defacements also have no exchange value, including those with markings on the portrait of the Yang di-Pertuan Agong or writings depicting political, religious and racial elements.

On whether the central bank will issue any new currency series, BNM says it would come up with a new series every 10 to 15 years, depending on the need to replace or upgrade security features.

“The current security features on our banknotes are still robust against counterfeiting where our counterfeiting rates are among the lowest in the world,” it adds.