4 PATER E NhEE ADH a NATIONAL BANK OF ETHIOPIA ADDIS ABABA (CMD/240/2015 ‘September 17, 2015 mage) a neat, Consucton & Burnes Bonk S.C DBL, Ma. Bu, Aoshima! omc ; = S = ae Bank of Abyssinia S.C. \Wegagen Bank S.C. United Bank S.C. Cooperative Bank of Oromia S.C. tivoroslenksc eet pres te ~ Lon International Bank S.C. men Bank S.C. Pp) ue pp ‘Oromia International Bank S.C. Bunna International Bank S.C. Pvneate Fare Abay Bank S.C ‘Addis International Bank S.C, perl! Lom, ple Pre Debub Global Bank S.C. Enat Bank S.C. AAP YSTNG Berhn International Bank S.C. 2) J ‘Addis Ababa ae) It is recalled that decision has been passed on our meeting with tréasurers of all banks dated September 8, 2015 to revise the existing Currency Sorting and Damaged Notes Exchange Guidelines and distributed to user banks for their purpose. ‘Treasures participated on the meeting have strongly emphasized the importance of revising the document so that they can provide exchange services to the satisfaction of the public. In a view to prepare standard guidelines acceptable to all parties involved in currency sorting and damaged notes exchange services, it is become necessary to collect comments and opinions from stakeholders and include to the document if found important. Therefore, we have attached a ‘comments, whatever ‘September 30, 2015. ee HE. The V/Goveror Financial Institutions Supervision National Bank of Ethiopia ‘Ads Ababa copy of the existing guidelines and request you to send us your limitations you have observed on the document in writing up to ARGH AD RG Te ADDRESS, SUDAN STRCET. E-mail nbe exseid cthionet.et 3550/2048 4h HPC 0115 $1 45.88 NAN HPC OTIS $1 7430 AA P.O BOX 55502048 FAX No 0115514588 TEL No O15 517430 ADDIS ABABA TELEGRAPHIC ADDRESS: NA TIONBANK CODES-USED PETERSON 3" 4" ED BENTLEY'S 2" PHRASE ABC 6* EDITIO Website, www hip "www nbe gov etNational Bank of Ethiopia ie Ny ig 8| Mationdl Bank OF Eolhtorpten dp. Sorting and Damaged Notes Exchange GuidelinesNATIONAL BANK OF ETHIOPIA SORTING AND DMAGED NOTES EXCHANGE GUIDELINES 1. INTRODUCTION Article 5 of the NBE establishment Proclamation No. 591/2008 gives National Bank of Ethiopia (NBE) the legal manéate to issue Ethiopian banknotes. In addition to ensuring sufficient supply of the banknotes, the NBE is also responsible to mzintain their integrity and quality. To achieve this, itis critical that the condition of the banknotes in circulation must be maintained at the desired level. This Guideline lays down minimum quality standards for recirculation of Birr notes, describes the cash notes sorting, counterfeit identification and exchange of damaged notes. 2 DEFINITIONS 2.1 ‘Fit Birr note’ means a Birr note that meets the quality criteria and standards set in this Guide- lines for re-circulation. 2.2 ‘Unfit Birr note’ means a Birr note that has the characteristic(s) which renders it unsuitable to be kept in circulation as set out in this Guidelines. 3. PURPOSE The principal objective of issuing this Guideline is to ensure integrity, quality and preservation of Birr notes in circulation and, by extension, the public’s trust in the banknotes. Other objectives include:- establishing a clear and acceptable criteria and standard for determining the quality of Birt notes to be reissued by banks to their customers, fostering clean money policy, combating counterfeiting activities, and helping banks to apply common standards in identifying fit or unfit banknotes. 4, PRINCIPLES Banks shall re-issue Birr notes to customers only if these banknotes are duly checked for authenticity and fitness according to the criteria laid down in this Guideline. The authenticity and fitness checks of the banknotes to be recycled shall be performed either by banknote handling machines or by trained bank staff. 5. CRITERIA AND STANDARDS TO DETERMINE FITNESS/UNFITNESS OF BIRR NOTES. a) Soiled Soiling refers to the general distribution of dirt or liquid across the entire note or localized with or with out patterns. Both the obverse and the reverse of the note shall be checked for soiling. Birr notes excessively soiled shall be considered unfit (see illustration i)db) ©) d) °) Limpness Limpness relates to structural deterioration or wear resulting in a marked lack of stiffness in the note paper. Notes with a very low stiffness shall be sorted as unfit (see illustration II). Holes This refers to notes with at least one visible hole. Note with holes with area exceeding 10 mm? shall be sorted as unfit (see illustration III). Tears Notes exhibiting at least one tear at the edge shall be classified as those having tears. Notes with tears larger than 15mm in any direction of the note (vertical, horizontal, diagonal) shall be sorted as unfit. (see illustration IV). Stains Notes shall be detected as unfit if localized (i.e. with limited extension) stain (by ink, blood, chemical or any other colored substance) with a total cumulative area of 20mm? can be recognized on its surface. Both the obverse and the reverse of the note shall be checked for stains (see illustration v) ) 3) h) Defaced Defaced note refers to damages of the note with for example, figures, letters, signs, symbols or other writings extended for 1/8 of the note’s total area. Fitness sorting criteria in case of defaced notes shall be the same as those for stains, Both the obverse and the reverse of the note shall be checked for graffiti. (see illustration vi) Discoloration Notes affected by loss of the original colour due to for example, washing, subjecting to chemical agents, shall be sorted as unfit if the colour of the note is partially or wholly missing from its surface. Both the obverse and the reverse of the note shall be checked for Discoloration (see illustration vii) Repair A repaired note is created by joining parts of the same note together, for example, by using extraneous matter such as tape, paper or glue. Repaired notes shall be sorted as unfit. (see illustration viii) Burnvinfested Bank notes damaged by fire, insects or other animals with damages exceeding 15mm shall be unfit. (see illustration ix & x)j) Missing Security Feature Abank note with any one or more security feature missing or is defective shall be unfit. 6. IDENTIFICATION OF COUNTERFEIT NOTES User banks shalll identify a genuine Ethiopian Currency notes from counterfeit notes. In determining genuine notes user banks shall at a minimum apply the following; A) Length, Width and Weight below shows length, width and weight of genuine Birr Notes. [Denominations | Length Width Weight mm mm gram ai: cael 60 135 | 95 gm2 5 65 140 95 gm2 10 67 142 95 gm2 | _50 70 145 95 gm2 100 72 147 95 gm2, B) Surveillance through observation and hand touch; 1. The portrait to the Ethiopian map in Birr 100, Birr 50, and Birr 10 genuine birr notes must felt rough when touched with tip of the fingers. 2. In most cases suspected counterfeit notes are very colorful or dim, in both cases different from the genuine birr notes. Genuine note is identified by examining the color of the note. 3. The portrait of lion on the front side of the note in all denominations must be visible clearly. Genuine note is identified by observing the clarity of the portraits. 4. Counterfeit notes can be recognized by the texture of the paper. The fitness of the print quality on a genuine banknote is difficult to imitate. 5. Birr 100, Birr 50, Birr 10 and 5 notes contain \dowed embedded security threads. This thread is partially exposed and partially embedded. When held against light, this thread can be seen as one continuous line. Birr 100 and Birr 50 notes contain fully embedded security threads. This thread contains inscription of the words NBE and portrait of Axum Monument. Genuine note is identified by clarity of the portraits by observing the security thread. 6. The serial numbers on the right and left side of the notes and the name the National Bank of Ethiopia. ©) Use ultra-violate light to identify fluoresce security features. 1. Look on the center of the Birr 100 and Birr 50 note under ultra-violet light io check that the number 100 and 50 features in geese fluoresce. The rest of the note should not fluoresce.2. Holding the Birr 100 and Birr 50 note to the ight should reveal portrait of a farmer plow with two oxen at the right side of the notes. 3. The numbers showing the face value in Birr 190, Birr 50 and Birr 10 on the center of the portrait of the Ethiopian map at the left side, the number must be repeatedly visible when the notes are held up to the light. 4. The numbers showing the face value in Birr 5 and Birr 1 on the center the portrait of the Ethiopien map within the triangle at the left side the notes must be visible clearly and be in geese when the notes are held up to the light. The numbers both in the map and the triangle must overlap. Genuine note is identified by holding the note up to the light. 7. REIMBURSEMENT OF UNFIT GENUINE BIRR NOTES. Banks are required to exchange with their customers unfit genuine Birr Notes for fit and good notes in the following manner. a. Full value of unfit genuine Birr Note if a custome: presents at least; * Three-fourth of the total size of the note and provided that all the digits of the serial numbers on either side * One-half of the total size of the note and provided that all the digits of the serial numbers appear on one side and at least a certain di (illustration 2.3) + Three-fourth of the total size of the note and provided that half of the serial numbers on both sides of the note appear. (illustration 2.4) * Three-fourth of the total size of the note and provided that all the digits of the serial numbers appear on one side and both alphabets on the other side of the note. (illustration 2.5) + All torn parts of the notes are attached and provided that all alphabets and serial numbers appear in both sides of the notes. (illustration 2.6) b. Half of the value of unfit genuine Birr Note if a customer presents one-fourth or above of the size of the note and where all the digits of the serial numbers appear only on one side and no serial number on the other. (illustrations 2.7-2.11) cc. No value shall be exchanged in all other cases.Illustration I Illustration [1 i) Samples of Deteriorated Notes Soiled Notes Limp rotes The sample represents all types of notes and the sorting procedwe | The sample represents all types of notes and the sorting procedure should should hold for all Soiled denominations. hold for all Limped Notes denominationsIllustration TI Illustration 1V holes / Pores ‘Tears The sample represents all types of notes and the sorting procedure should hold for all denominations Kaving similar Porestholes. The sample represents all types of notes and the sorting procedure should hold for all denominations having similar Tears. 12: 13Illustration Illustration Stained Notes Defaced The sample represents all types of notes and the s The sample represents all types of notes and the sorting procedure should hold for all denominations having similar def should hold for all denominations having similar stains. 14 15Illustration Vii Discoloration cT65s0046 eta eaaiee 146 The sample represe procedure should discoloration. for all denominations having similar 16 The sample rept should hold for Repaired Notes -paired notes.Illustration ix Illustration x a) Burnet Notes fis b) Infested Notes The sample represents all types of notes and the sorting procedure should hold for all infested denominations The sample represents all types of notes and the s dure should holdfor all denominations having burnt notes: 18 19Mlustration 2..3 ii) PATTERNS FOR D3TERMINATION OF VALUES FOR Damaged NOTES Illustration 2.1 FULL Value Illustration 2.4 Full Value FULL Value 20 21Illustration 2.5 Illustration 2.7 HALF VALUE, No VALUE, Illustration 2.8 HALF VALUE ‘When different tears attached and presented for exchange, it will have HALF VALUE, full value 22 23Illustration 2.9 HALF VALUE Half Value- «Half Value Illustration 2..U1 Half Valuel |