Central Bank to Penalize Banks Refusing Damaged or Mutilated Notes

According to a fresh circular issued by the central bank, all bank branches are now mandatorily required to receive damaged notes in accordance with existing regulations and provide customers with new or re-issuable notes in exchange. This emergency instruction aims to eliminate the ongoing suffering of citizens who frequently face difficulties in daily cash transactions due to the prevalence of worn-out currency in the market.

The circular noted that despite a similar directive issued in December 2025, a significant volume of torn and soiled notes remains in circulation, causing major hurdles in retail shopping and small-scale trades. To effectively implement the "Clean Note Policy," the central bank has placed a special emphasis on lower-denomination notes, specifically 5, 10, 20, and 50 Taka bills. Banks have been instructed to utilize their dedicated counters to regularly accept these damaged notes and ensure immediate exchange services for the general public.

Bangladesh Bank further warned that any bank branch found reluctant to accept such notes or negligent in providing proper exchange services will face strict administrative action. The central bank reiterated that ensuring the supply of clean and defect-free notes is a primary responsibility of all banking institutions. Maintaining the integrity of the currency is considered essential for the steady flow of the economy and for upholding public confidence in the national monetary system.

All scheduled banks have been directed to take immediate necessary steps to follow the instructions of this circular without any deviation. The central bank's monitoring teams are expected to conduct random inspections to ensure compliance at the field level. By enforcing these measures, the authorities hope to replace damaged currency with high-quality banknotes, thereby improving the overall quality of cash circulation across the country.