Bangladesh Bank has introduced a comprehensive new policy to address customer difficulties arising from damaged, torn, or burnt banknotes. Under the new regulations, individuals whose notes have deteriorated due to prolonged circulation or accidental damage will now be able to redeem their value at a rate determined by the bank. The directive, issued via a circular to the chief executives of all commercial banks across the country, has been made effective immediately.
According to the updated guidelines, any banknote retaining more than 90 per cent of its original condition will be eligible for a full refund. The policy, formally titled the Bangladesh Bank Note Redemption Regulations 2025, supersedes the previous Bangladesh Bank Note Refund Regulations 2012. Earlier provisions had been vague, often leading to disputes between banks and customers regarding the exchange of torn or partially destroyed notes. The new framework clearly establishes the exchange value based on the remaining portion of the note.
The circular further clarifies that if a note is split into two pieces, both parts must unquestionably belong to the same note. During submission, a thin sheet of white paper should be placed between the pieces to facilitate identification. Even if a fragile note tears further during verification, the same procedure will apply.
Damaged notes may now be exchanged at central bank branch offices as well as commercial bank branches. It is important to note that full redemption is only possible for notes maintaining more than 90 per cent of their original form. Such notes are typically replaced immediately. Other torn or partially damaged notes will also be exchanged promptly, albeit at a proportionate value according to the regulations.
The policy stipulates a clear grievance process for customers. Should a bank branch refuse to exchange damaged notes, customers may submit an application to the respective branch. If the issue is not resolved at branch level, it may be escalated to the bank’s head office and, ultimately, to Bangladesh Bank. The central bank is committed to providing a final decision and implementing any necessary adjustments within eight weeks of receiving an application.
The circular emphasises that all banks must ensure smooth cash transactions by offering consistent services for exchanging torn, defective, or soiled notes. Any branch found reluctant to provide such services will face stringent action from the central bank, reinforcing a commitment to fair and accessible banking services nationwide.