State Bank of Pakistan (SBP) has decided to penalize commercial banks by up to Rs. 10,000 if its officials don’t accept and exchange cut, soiled, mutilated and defective currency notes.
Bankers at different branches of various banks usually considered this service as a headache while exchanging new or useable currency notes with the defective banknotes. Due to this, customers were not facilitated by the banks duly. And furthermore, the banking system’s refusal to help kept the defective notes circulating in the system.
Denial of service, with respect to defective currency notes by banks branches is a widespread practice, even though they represent the only solution for recycling of banknotes by the central bank in the banking system. Usually, the central bank carries out recycling of these types of currency notes or trash them completely by reissuing banknotes of the same denominations.
More Penalties Announced
Moreover, the banks will be also slapped with a penalty of Rs. 20,000 if officers continue to deny accepting small denominations of currency notes from customers when seeking transactions or deposits of funds or payment of utility bills and etc,.
Banks will face a fine of Rs 2,000 per event if they do not accept legal tender coins and do not provide banknotes and coins exchange facility to all the customers and general public.
The central bank stated that it will impose a penalty of Rs. 20,000 on banks if soiled banknotes deposited by commercial banks were found to contain more than 20% of re-issuable banknotes or vice versa.
These penalties are part of the issued Currency Management Strategy of the central bank, which envisages transformation of currency management functions from manual to automated environment and revamping the cash processing operations across the banking industry as per international best practices.
The new penalty structure will supersede all previous penalty instructions regarding cash management operations of the banks.
All banks are advised to ensure strict compliance with the currency management instructions issued from time to time as any violation thereof would attract punitive action.
How Customers Can Take Action Against Banks
In case you face such an issue with your bank where they don’t exchange your currency notes, you can simply lodge a complaint with the central bank.
State Bank of Pakistan (SBP) has established a dedicated helpline in Karachi with the Universal Access Number (UAN) 111-727-273. This helpline will operate during the working hours of SBP, from Monday to Friday.
Besides, banks should not only facilitate their customers’ services while addressing this issue but also avoid such penalties of the central bank through an ethical officer deputed at any branch as per SBP’s orders.