Bangladesh Banks Balk at Issuing Coins|
March 20, 2013
There is a shortage of small change coinage in circulation in Bangladesh, but you can blame this shortage on the commercial banks, not on the government.
The Ministry of Finance and the Bangladesh Bank are each doing their part. Central bank currency officer Saiful Islam Khan was quoted in the January 28 online issue of bdnews24.com as saying, “An additional amount of coins remains idle in Bangladesh Bank vaults. We can supply coins as much as the banks ask for.”
The culprit in this situation is the banks. They aren’t asking for more coins. They aren’t even complying with the mandate that they must distribute 1.5 percent of all currency transactions in the form of coins. Banks are also required to have a special counter and appropriate signage where torn bank notes can be redeemed. This is also being ignored.
The results are a shortage of coins in circulation, while very worn bank notes are continuing to circulate instead.
Coins were introduced in denominations of 5, 10, 25, and 50 poisha in 1973, with the small change 1-poisha coin following a year later. A 1-taka coin followed in 1975. Both a 2- and a 5-taka coin were introduced in 2004. Today the 1- and 5-poisha coins are rarely encountered, while the 10, 25, and 50-poisha coins are used even less. The taka denominated coins are those circulating regularly, when the banks allow them to be distributed properly. There are 1- and 5-taka bank notes available as well, but these are being gradually replaced with their counterpart coins.
Although there have not been any recent changes to the circulating coinage, in 2011 the Bangladesh Bank issued a new series of bank notes in denominations as high as 1,000 taka. An even newer set of 10-, 20, and 50-taka notes was released the following year.
In January the central bank issued a 25-taka bank note to mark the silver jubilee of the Security Printing Corporation (Bangladesh) Ltd. Since the appropriate security paper was not available for the commemoratives the SPC used 10-taka bank note paper on which an electrotype 10 appears in the watermark.
The central bank holds monthly meetings with commercial banks. It was at February’s meeting that Bangladesh Bank Executive Director Subhankar Saha chewed them out for their inaction. Perhaps the March meeting will be a little more pleasant.
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