Bankers appeal for BSP to accept damaged notes

CEBU, Philippines - The Cebu Bankers Club has appealed to the Bangko Sentral ng Pilipinas for the latter to consider accepting banknotes with no security thread from the banks until end of this month.

CBC President Gino Gonzalez, however, said the amount of these damaged notes currently held by each bank is estimated at tens of thousands only.

“Based on the reports from banks, di kaayo daghan [just in few bundles] nga naa sa ilang vaults gipangtago,” Gonzalez said in an interview, noting that banks were obliged to accept these from their clients.

The CBC has already sent a letter to BSP asking it to compensate their mutilated bills that have lost their security thread. CBC is still awaiting an answer.

When sought for comment, Remedios Ilagan, senior currency specialist at the BSP, said bankers have the right to appeal and that the central bank understands their concern. 

“But for now as far as maintaining the integrity of our currency [is concerned], we declared those kinds of notes as no value to discourage those people who willfully mutilate our currency,” Ilagan told The FREEMAN yesterday. 

Amended BSP Circular 829 of 2014 says that no compensation is given to notes that have completely lost the embedded or windowed thread, a thin ribbon vertically implanted off center of the note.

But there’s an exception: the BSP shall redeem notes considered unfit for circulation or mutilated if “the damage appears to be caused by wear and tear, accidental burning, action of water or chemical or bites of rodents/insects and the like.”

Security thread of P50 and P20 is embedded while that of P100 to P1000 is windowed.

Gonzalez thought that fakers may have gotten the windowed threads of some notes and transferred them into counterfeit money with high denomination. 

Ilagan stressed bank tellers and the public as well should be vigilant and expert in handling mutilated notes.

In a recent advisory, Gonzalez has recommended CBC member banks to stop accepting notes without the embedded or windowed security thread. He said: “A copy of Circular 829 should also be posted in the branch premises and provided to our front liners for ready reference.”

The currency specialist also said the public can refuse to accept mutilated notes but should advise other people handling these notes to have them checked with the BSP.

She explained: “It is a way to confiscate and withdraw those kinds of notes to stop circulation. It is the banks’ prerogative not to accept but they should advise the people to bring it to BSP Cebu.”

However, Circular 829 also provides that banks shall accept mutilated notes or coins for referral to the BSP’s Currency Issue and Integration Office or any of its regional offices for determination of redemption value. Banks are allowed to charge their clients “reasonable handling fees” for this service. (FREEMAN)