Payment System Cash Management Operations

Payment System Cash Management Operations

1.
Q: It is often that members of the public come into possession of banknotes that are unfit or even no longer valid as legal tender. What can they do?

A: If a member of the public receives banknotes that are unfit or no longer valid, these notes should be collected first until a reasonable amount is accumulated, before taking them to Bank Indonesia for exchange with new currency at the same face value.

2.
Q: Why should the unfit or demonetised banknotes be collected first?

A: That is merely a matter of efficiency. If one has to travel to a BI office to redeem only one banknote of only modest face value that is unfit or no longer valid, that inevitably costs something. Obviously, it is not worth the effort if the cost of exchanging is more than the face value of the rupiah to be redeemed.

3.
Q: For convenience’s sake, isn’t it possible to redeem banknotes that are unfit or no longer valid as legal tender at the nearest bank?

A: If possible, go straight to BI. True, members of the public can visit a nearby bank to redeem unfit or demonetised banknotes, but then the bank will have to exchange these notes again at BI.

4.
Q: Why is it that rupiah banknotes seem to deteriorate so easily?

A: In reality, rupiah banknotes would not wear or tear easily if the public would handle the money they receive in the proper manner. As we all know, earning money is hard, so why don't we handle each bit of rupiah we receive as something of value, for example by not folding or crumpling so that the banknote does not become shabby and dull. Let’s take proper care of every piece of the rupiah currency we have worked so hard to earn. If all members of the public would care for and look after the rupiah currency, the banknotes would not deteriorate quickly

5.
Q: What are the criteria for damaged currency that may be redeemed at BI?

A: If a member of the public receives rupiah damaged to the extent that less than half (= 50%) remains intact, for example, only a quarter of a banknote, BI cannot provide a replacement. However, if more than half (= 50%) of a damaged note is intact or it still has a serial number, BI will exchange it for a new banknote of equivalent face value.

6.
Q: Now, if a member of the public receives counterfeit money, can that also be exchanged at BI?

A: Absolutely not. Why? If BI accepts counterfeit money for exchange from the public, that would be tantamount to legalising the crime of counterfeiting. Imagine then if counterfeiters printed as many forged banknotes as they could and then turned them in to BI. This would obviously have a disruptive effect on the economy, particularly in regard to the targeted money supply. The impact of this would be to drive up inflation. For this reason, counterfeit money will not be replaced by BI. Counterfeit money handed in by the public will be passed on to the police for investigation and subsequent action.

7.
Q: Can you explain why BI has made banknotes in designs and colours that are similar? For example, the Rp 100,000 note issued in 2004 and the Rp 10,000 note issued in 2005, when seen at a glance and especially in the dark, appear to share the same design and colour. If not examined closely, one can be mistaken for the other.

A: True, when seen at a glance, some colours appear similar. However, BI always disseminates information to the public in advance of launching a new banknote or coin. If the Rp 10,000 and Rp 100,000 denominations are examined carefully, the differences in design and colour will become obvious. It should be added that each plan for issuance of a new denomination, no matter what the face value, passes through a long and selective process