BSP reminds banks to optimize circulation of fit banknotes, coins

MANILA, Philippines - The Bangko Sentral ng Pilipinas (BSP) is reminding banks operating in the Philippines to strictly comply with the central bank’s campaign to optimize the circulation of fit banknotes and coins.

BSP Deputy Governor Nestor Espenilla Jr. issued Circular Letter No. 2011 - 059 directing banks to conduct periodic compliance testing to cover their compliance with the Clean Note Policy and Coin Recirculation Program.

“In order to ensure that banks comply with the Clean Note Policy and Coin Recirculation Program, banks are required to incorporate measures on the implemeritation thereof in their compliance program,” Espenilla stated in the circular dated Aug. 12.

The BSP is mandated by Republic Act 7553 or the The New Central Bank Act of 1993 to issue currency and regulate as well as manage its circulation.

He pointed out that the central bank has mandated banks to accept unfit Philippine currency notes and coins from the depositing public and observe the expeditious wlthdrawal thereof from circulation as well as implement the Clean Note Policy under Circular No. 61 dated January 1995.

He added that banks are also required to arrange direct exchange of their accumulated excess fit currency notes or coins with other banks to optimize circulation of said notes or coins under Memorandum No. 2007-027 dated September 2007.

Espenilla also encouraged banks to perform their duties as authorized agent banks of the BSP in view of the limited circulation of coins in the economy.

“In view of the limited circulation of Philippine coins in the economy, banks are enjoined to perform their duties as authorized agent banks of the BSP, as sole issuer of Philippine currency, by accepting without handling fees or charges, nonmutilated coins for deposit from the public, regardless of amount,” he added.

According to him, banks were also directed to re-circulate the coins received from the depositing public in the course of their buiness.