The central bank of Bangladesh has issued a new set of regulations regarding the exchange of damaged, torn, or otherwise defective currency notes, ensuring that customers can recover the full value of their money under certain conditions. According to the guidelines, any banknote with more than 90 per cent of its surface intact can be exchanged at full value at any bank branch.
However, notes with 90 per cent or less remaining, or those heavily soiled, cannot be immediately exchanged at bank counters. In such cases, depositors must submit the notes to a bank branch, which will forward the application to Bangladesh Bank. Subject to approval, the reimbursement for such notes will be processed within a maximum of eight weeks.
The new regulations were formalised on Monday under the framework of the “New Banknote Refund Regulations” issued by Bangladesh Bank on 9 October. The central bank recently discontinued its own cash exchange service, placing the responsibility of note exchanges entirely on commercial bank branches. Every branch is now mandated to provide exchange services for unusable, torn, defective, or damaged notes.
Banknote Categories
The circular classifies banknotes into five categories based on usability and condition:
Re-circulable notes – fully usable and remain in circulation.
Uncirculable notes – worn or damaged but exchangeable.
Torn, damaged, or defective notes – exchangeable with conditions.
Claimable notes – heavily damaged or soiled notes requiring central bank approval.
Burnt notes – notes destroyed by fire, to be submitted directly to Bangladesh Bank for review.
Banknotes with more than 90 per cent intact must be exchanged immediately at any bank branch. Notes with 90 per cent or less, or excessively soiled notes, are considered claimable. After receiving the application, Bangladesh Bank will evaluate the note and inform the bank of the exchange amount within eight weeks. Burnt notes are not reimbursed by banks; depositors must apply to any branch of Bangladesh Bank for verification and approval.
All bank branches are required to prominently display notices confirming the availability of services for torn, defective, or claimable notes. Customers attempting to submit counterfeit or improperly assembled notes will face action under existing laws.
Key Points – Torn and Defective Banknote Exchange
| Category | Guidelines |
|---|---|
| Notes >90% intact | Full value reimbursed immediately at any bank branch |
| Notes ≤90% intact / heavily soiled | Submit application to bank; Bangladesh Bank approves within 8 weeks |
| Burnt notes | Submit directly to Bangladesh Bank; exchange subject to verification |
| Exchange service | Available at every bank branch |
| Bank responsibilities | Display service notice; process exchange applications; compliance mandatory |
| Penalties | Legal action against counterfeit or tampered notes |