Banks authorized by the National Bank of Ukraine (the NBU) to provide custodial services pertaining to the NBU cash reserves, will accept hryvnia banknotes unfit for circulation from individuals and legal entities in the regions where the NBU regional offices are no longer available.
It concerns considerably damaged banknotes that have lost their fitness for use as a result of fires, floods, staining by chemicals, etc.
Authorized banks will not examine such banknotes. They will pack the banknotes preserving their completeness as much as possible and then forward them to the NBU as doubtful for further examination. The banknotes are packed with an application and respective reference information on banknote withdrawal/acceptance for examination.
The authorized banks were obliged to do so by NBU Board Resolution No. 134 On Approval of Rules to Define Fitness for Use and Exchange of Banknotes, Small and Circulation Coins of the Domestic Currency of Ukraine (hereinafter – Resolution No. 134) dated 3 December 2018.
For your information, previously, banknotes unfit for circulation were accepted for examination directly by regional offices of the NBU.
The following three banks – Oschadbank JSC, PrivatBank PJSC, and Reiffeisen Bank Aval PJSC – have the status of the authorized banks eligible to provide custodial services pertaining to the NBU cash reserves.
Currently, the NBU has regional offices in the following oblasts: Dnipropetrovsk, Zaporizhzhia, Odesa, Kharkiv, Khmelnytskyi, Lviv, and Kyiv.
Additionally, Resolution No. 134 provides more specific definitions for certain signs of wear and defects that affect fitness sorting of banknotes and coins.
Resolution No. 134 comes into effect on 2 January 2019.
The document was approved due to the transformation and centralization processes in the NBU’s system. Resolution No. 134 regulates paying and receiving of banknotes, small and circulation coins of the domestic currency of Ukraine by banks, non-bank financial institutions, and the national operator of postal services for all types of payments as well as for crediting accounts, deposits, letters of credit, transfers, and exchange.
For reference
All banknotes that remain in circulation for a long period of time eventually lose their initial appearance, in other words, they start showing signs of wear and tear.
Particularly, banknotes are considered unfit for circulation if they show ink wear, are partially de-inked, have paper fringing and limpness, general or local soiling, stains and graffiti, stamp marks, tears, holes, cuts and perforations, missing pieces or corners or attached with adhesives, or whole banknotes mended with an adhesive.
Retailers must accept as payment for goods and services unfit banknotes of all denominations without any limitations unless the banknotes arouse any doubts about their authenticity or fitness for commerce.
At the same time, retailers are forbidden to give as change unfit banknotes received from customers and must deliver such banknotes to their servicing banks together with their proceeds.
Banks must accept unfit banknotes from individuals and legal entities without limitation, unless they bear signs of counterfeiting, for further exchange for fit banknotes as well as for any cash payments, crediting to accounts, deposits, letter of credits, etc.
Banks are obliged to withdraw all other damaged banknotes from circulation or accept them for examination as doubtful and forward them for examination to the corresponding NBU regional offices under the established procedure.
Based on the results of the examination, which the NBU carries out free of charge, the correspondent value of the domestic currency banknotes and coins that were found authentic and fit for commerce is reimbursed to customers.
Counterfeited banknotes and coins are withdrawn without reimbursement and forwarded to the National Police of Ukraine under the established procedure for further investigation.