Bank Negara issues Policy Document on Quality and Integrity of Currency
15 September 2023
On 12 September 2023, Bank Negara Malaysia (“
BNM”) issued the
Policy Document on Quality and Integrity of Currency (“
the Policy Document”), which will come into effect on 1 October 2023.
When the Policy Document comes into effect, it will supersede the Guidelines on Handling of Suspected Counterfeit Malaysian Currency Notes issued by BNM on 2 September 2014.
The Policy Document is issued by BNM in the exercise of its authority as the sole issuer of currency note and currency coin in Malaysia under the Currency Act 2020
1 (“
the Act”).
The Policy Document applies to:
- licensed banks under the Financial Services Act 2013;
- licensed Islamic banks under the Islamic Financial Services Act 2013;
- prescribed institutions under the Development Financial Institutions Act 2002;
- licensees under the Money Services Business Act 2011; and
- registered currency processors under the Act,
(collectively “FIs”).
The Policy Document, inter alia, sets out:
- the criteria to be applied in determining the quality of currency note and currency coin in circulation;
- the standards to be adhered to by FIs in processing currency note and currency coin, and recirculating them to the public;
- the standards to be adhered to by FIs in handling suspected counterfeit Malaysian currency in Malaysia when:
- deposited or exchanged by members of the public with FIs over the counter;
- discovered by FIs during cash processing at the FIs’ premises; or
- discovered by FIs at Self-Service Terminals2;
- the requirement for FIs to record and report the discovery of suspected counterfeit Malaysian currency to their headquarters, BNM, Polis Diraja Malaysia (“PDRM”) and relevant persons;
- the timeline for FIs to lodge a police report with PDRM of the discovery of suspected counterfeit Malaysian currency; and
- the requirement for FIs to have competent staff, and to calibrate and perform attestation on their currency processing machines.
Part B (paragraphs 9 to 15) of the Policy Document, inter alia, sets out the following:
- Criteria for Fit Currency;
- Criteria for Defaced Currency Note and Unfit Currency Note;
- Criteria for Tampered Currency Coin and Worn Currency Coin;
- Obligations when Processing Currency;
- Procedures and Requirements for Submission of Defaced Currency Note (excluding Unfit Currency Notes), Tampered Currency Coin (excluding Worn Currency Coins), and Demonetised Currency to BNM; and
- Procedures and Requirements for Submission of Unfit Currency Notes and Worn Currency Coins to BNM.
Part C (paragraphs 16 to 18) of the Policy Document, inter alia, sets out the following:
- Procedures on Detention and Recording of Information on Suspected Counterfeit Malaysian Currency; and
- Reporting of Information on Suspected Counterfeit Malaysian Currency.
Part D (paragraphs 19 to 21) of the Policy Document, inter alia, sets out the following:
- Requirements on Currency Processing Operation;
- Requirements on Currency Processing Machine; and
- Requirements on Recording, Reconciliation and Reporting.
1 Our write-up on the Act when it was a Parliamentary Bill can be accessed
here.
2 “Self-Service Terminals” refers to Cash Deposit Machines which facilitate the deposit of currency notes with FIs by customers, Cash Recycler Machines which facilitate both withdrawal and deposit of currency notes with FIs by customers, and Coin Deposit Machines which facilitate the deposit of currency coins with FIs by customers.
This alert contains general information only. It does not constitute legal advice nor an expression of legal opinion and should not be relied upon as such. For further information, kindly contact skrine@skrine.com.