Syed Nasir Hossain: The government has to spend huge amount of money every year to print new money. The durability of these notes in paper is decreasing due to the systematic use. Paper notes become unusable within six months. Compared to that, the cost is higher, but the durability of metal coins is also much higher. According to the demand, the government spends over Tk 500 crore every year just to print new notes. The central bank is leaning towards cashless QR (quick response) transactions to rein in costs.
Bangladesh Bank sources told this information. A source says that money does not last as long as before. Paper notes are destroyed in six months. Which were burnt after being stored in Bangladesh Bank. New notes are introduced after burning unusable notes and market circulation or money flow. That is, new notes are printed. In this case too, market tools are used to review and see how much new money is needed. In that way, overprints are released based on market demand.
The central bank is also thinking of alternatives as the cost of paper notes is high. The regulatory body of the financial sector is gradually moving towards cashless. Digital platform is being brought for this. In the meantime, transactions through QR codes have been started in the capital Dhaka. Initiatives are being taken to spread the medium everywhere.
However, while applauding transactions through QR codes, experts advise to be more aware and cautious about it. They say, it also needs to be seen how widespread the concept of transactions through QR codes is. It can also lead to fraud and theft. Many are victims of cybercrime. Caution should be given more priority.
Currently there are 65 money printing factories in the world. The name of the factory in Bangladesh is Takkshal. Before minting started, money was printed from other countries. These include – Switzerland, Germany, India, South Korea and England.
The mint’s printing process is very secretive. There are about 12 steps to make money. The use of mobile phones or any type of device by all employees is also prohibited inside the factory.
When notes come in circulation in country?
Bangladesh gained independence in 1971. Then on March 4, 1972, the country’s own paper currency was launched. The first note to bear the map was one taka. The one taka note was signed by Finance Secretary K A Zaman. Bangladesh issued Tk 5, Tk 10 and Tk 100 notes in 1973. Then Tk 50 and Tk 500 notes were introduced in 1976. Tk 20 notes were issued in 1979. Two taka notes were introduced in the country in 1988. On July 17, 2009, the highest quality Tk 1000 banknote was introduced in the market.
How much does it cost to print
A senior official of the relevant department of the Central Bank told that printing a Tk 1000 note costs Tk 5 and printing a Tk 500 note costs Tk 4 and a half. Apart from this, Tk 200 notes cost a little more than Tk 3, Tk 100 notes cost Tk 4, Tk 10, Tk 20, Tk 50 notes all cost one and a half taka. And the cost of printing Tk 5, Tk 2 notes is about one and a half taka.
Coins are the most expensive. Each coin costs roughly the same amount of money to produce. But coins cost more money but are more durable. A huge amount of money is spent annually to print these notes. For this reason, the central bank now wants to move towards cashless.
How long validity of paper notes?
Many times, misleading news about demonetisation is spread on social media. Misinformation also creates fear in the public mind. In this, the stability of the country’s currency management is about to be destroyed. There is no fixed term of use of any note. But now printed notes are not lasting more than six months. Coins are more durable. Bangladesh Bank replaces any obsolete notes.
Demand for new notes high
Eid-centered demand for new notes increases. Bangladesh Bank issues new notes based on demand from banks. At this time, everyone from businessmen to ordinary people took new money. This note is more valued during Eid salami. New notes are not only supplied on the occasion of Eid, but are also released by looking at the money circulation or money flow in the market. Last year, even before Eid, about Tk 30 thousand crores worth of new notes were released in the market. However, this note is not printed before Eid.
However, this note is not printed before Eid. Newly printed notes remain in currency circulation and stock. Bangladesh Bank says that it is released according to the market demand. Due to which notes are destroyed One of the reasons why paper notes get ruined is folding them at will. For example, bus conductors keep money folded between their fingers. Many people keep money rolled up in earthen banks or bundles. It reduces the stability of money. Apart from this, money gets lost quickly due to handling money with wet hands, counting money with saliva, writing with a pen etc.
Ahmed, an official of a financial institution, travels regularly from Bashundhara to Paltan in the capital’s Victor Paribahan. Talking about paper notes, he said, we damage notes for no reason. Most of the damage is due to bus or human hauler (Laguna) helper’s willful folding. They fold the big notes of new or old money and keep them aside. This is the beginning of the loss of notes.
However, Suman, the driver’s assistant of the same bus, avoided the issue and said, “If you give big notes, we fold them and separate them for the sake of convenience.” Many passengers pick us up and give torn notes. Even after repeated counting, they tear.
Can you print notes if want?
The central bank will print money whenever it wants, there is no chance. It has specific procedures, which have to be followed. The whole thing depends on the economy. If the flow of money in the market increases, inflation will increase. This will increase the price of goods and increase the cost of living. This is why economists say that balance has to be maintained for the sake of the economy.
However, new notes are introduced after burning unusable notes and market circulation or money flow. Sometimes a decision to print money has to be made under special circumstances. Notes that are torn, burnt or can’t be re-issued are withdrawn from the market through banking channels by the central bank. Thousands of crores of taka were withdrawn in this way. Supply of new notes is also required to meet this deficit.
Economist and former governor of Bangladesh Bank Saleh Uddin Ahmed said that the Financial Currency Department prints money. But how much can be printed depends on the demand or old notes as the economy expands. Moreover, to print money, there must be foreign reserves, there must be enough gold. The central bank can’t print money.
Ahsan H. Mansoor, former official of International Monetary Fund or IMF and Executive Director of Policy Research Institute (PRI), told that the central bank cannot print money at will. It has some obligations. But if the government wants to take assistance, then an obligation comes at the request of the government. The government and the central government have many project-support mechanisms through which money is printed. Nothing can be done alone. If there is a board, that board’s approval will be required.
Bangladesh Bank Executive Director Majbaul Haque told that paper notes are not valid for more than six months now. A huge amount of currency notes is being wasted every day due to various reasons. In this, only the printing cost of notes falls to more than Tk 500 crore a year. In some previous years.
Digital transactions are increasing Transactions through digital channels are increasing gradually in the country. Demand for credit cards is also increasing. About Tk 21,000 crore are transacted on cards in the country every year. Transactions at point of sales (POS) machines also increased. At present Tk 27,000 crore are being transacted in 83,000 POS per year. Now online transaction is Tk 80,000 crore per year. Out of which Tk 27,000 crore is through POS, and Tk 53-54 thousand crore is transacted through QR code from mobile phone.
The opportunity to send money in a quick and easy way has been created through Mobile Banking (MFS) services. According to the latest calculations of Bangladesh Bank, in the month of October last year, mobile banking transactions were Tk 93,013 crore. An average of Tk 3,100 crore has been transacted daily. Thus, the use of cash is decreasing due to digital transactions. If these money were used hand in hand, the wastage would be more.
In this regard, Shamsuddin Haider Dalim, Head of Corporate Communications of Bikash Limited, told that transactions are now being done on digital platforms all over the world. We are doing transaction through QR code. It reduces the use of cash. Basically, transactions are done through digital means in a safe and fast manner. Which is also time consuming to use manually. Due to these reasons, now the country is also attracted by digital medium.
Paper notes are costing more, people’s interest is also digital. That is why the central bank is gradually moving towards cashless. In the meantime, transactions through QR codes have been started in the capital. Several banks and financial institutions have also started operations, many more banks want to come. Initiatives are being taken to spread this medium everywhere. This will save Tk 100 to Tk 150 crore, which can be spent in other sectors – this is what the central bank says.
Spokesperson of the Central Bank Majbaul Haque told that if we popularize the QR code, the use of cash will reduce a lot. Payments of even one taka can be made through QR code without any charges. It will not be a problem anymore. Taking our target there too. It won’t become popular overnight, maybe it will take some time. We will now go to the divisional cities with this service. If this service is popular everywhere, we will sell a lot of money. Even if it saves at least one hundred crore rupees, it can be spent in other sectors.
However, while applauding transactions through QR codes, experts also advise caution. Some may also become victims of cybercrime. This was discussed with Abdul Aleem, author and cybercrime-technological risk and security expert. He said that cashless money transactions are already underway in Bangladesh through technology. It’s nothing new, but the medium of QR codes is quite new.
He said that cashless transactions are already being done using mobile banking and bank apps. Now Bangladesh Bank wants to release new cashless money so that it is convenient for common people to make transactions easily. Due to lack of awareness, many people are still being cheated in online transactions, victims of cybercrime. In this case, there is no alternative to raising awareness.
Economist Dr. Saleh Uddin Ahmed said, this initiative of transaction with QR code is good. But how to do it in villages. Our financial literacy is very low. Transactions everywhere through QR codes will no longer be the case. It should also be seen how many ideas there are about it. Then again fraud-theft can be anything in between. But that’s okay, the initiative is good. We need to increase our awareness in the same way.
Talking about cashless with Ahsan H Mansoor told that cashless has many advantages. One of them is to print less money. But printing less money is not a big deal. The real issue is transparency, accounting transparency, accountability. Accounting is fast moving towards transparency through cashless.
“The money is in the banking system. The more cashless the financial sector, the bigger and deeper it will become. The more the use of cash increases, the more the financial sector will lag behind in development. Therefore, the more cash can be reduced, the better for the economy.
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