Ukrainian banks are required to transfer for the re-issuance to their branches and offices only those banknotes that have been processed by using the automated banknote processing systems. This requirement is in effect from 1 January 2017.
On 7 February 2017, the National Bank of Ukraine held a regular working meeting with experts in cash circulation and handling from banking institutions to discuss the practical issues faced by banks.
Director of the NBU Cash Circulation Department Mr Viktor Zaivenko emphasized that the automated banknote processing systems are used to keep the quality of banknotes in circulation high. “Bank customers have to be confident that the cash withdrawn through the cash desks or ATMs is of high quality and fit for circulation," said Mr Zaivenko.
Mr Zaivenko pointed out that this issue is becoming increasingly important in light of the implementation of the Policy on Cash Circulation in Ukraine (hereinafter– the Policy). As a side note, as part of this Policy, the NBU shall devolve some of its functions related to supporting cash circulation in the regions, including cash processing and handling, to other market participants, including authorized banks and CIT companies.
Currently, as of 1 January 2017, the cash in circulation amounted to UAH 341.1 billion, including banknotes worth UAH 339 billion (2.98 pieces) and coins worth UAH 2 billion (12.7 billion pieces). The total number of banknotes and coins per capita stood at 70 and 285 pieces respectively.
Mr Zaivenko underlined that in 2016 the NBU supplied the economy with high-quality banknotes and coins of all face values in sufficient amounts, as well as provided cash handling services to banks in accordance with the contracts. In 2016, a total of 820 million pieces of worn-out banknotes were withdrawn from circulation, which was by 11.5 % less than in 2015.
Mr Zaivenko also emphasized that the use of automated cash processing solutions enables the detection of counterfeits.
“The modern hryvnia banknote security system is as good as that of the world’s most popular currencies. Presently, the level of counterfeiting is kept under control. Thus, in 2016, approximately 2.8 counterfeit hryvnia banknotes were detected per million genuine banknotes in circulation,” added Mr Zaivenko.
Overall, the 500, 50, 100 and 200 hryvnia banknotes were particularly popular targets for counterfeiters.
The NBU experts informed the bankers about counterfeit incidents that were reported in in 2016 and drew the bankers’ attention to the security features incorporated in the banknotes to help the public to distinguish between genuine and fake notes.
In most cases, counterfeits are produced using photocopiers and scanners, such as ink-jet and laser photocopiers.
However, a small amount of 2006 design 500 hryvnia banknotes manufactured by printing method using similar to the original printing plates with an imitation of many security features was withdrawn from circulation in December 2016. The NBU experts briefed the bankers on the security features that help distinguish between genuine and fake banknotes notes and showed how to detect counterfeits.
For reference
Thus, in 2016, approximately 2.8 counterfeit hryvnia banknotes were detected per million genuine banknotes in circulation (in 2015 – 2.7 counterfeits, in 2014 – 3 counterfeits, in 2012 – 4.1 counterfeits, and in 2011 - 3.4 counterfeits).
For comparison, in the EU countries, according to data published on the ECB's website (www.ecb.int), 36 counterfeit euro banknotes were detected per million genuine banknotes in circulation (in 2015 – 49.9 counterfeits, in 2014 – 48 counterfeits, in 2013 – 43 counterfeits, in 2012 – 35 counterfeits, in 2011 – 46 counterfeits).