Bangladesh faces note shortage as government bans use of fresh cash
Bangladesh is facing a widespread shortage of usable banknotes, leaving many people frustrated as damaged bills flood the market while thousands of crores worth of fresh notes remain locked in central and commercial bank vaults.
Although Tk15,000 crore worth of new notes have already been printed, they have not been released into circulation.
This has led to a growing number of worn-out and torn notes being dispensed at ATMs and handed out at banks, sparking complaints across Dhaka and other cities.
Customers say the poor condition of money is making daily transactions harder.
Many shops and transport workers are refusing to accept torn bills, while money exchange vendors in Dhaka’s Gulistan market are charging extra for crisp new notes and offering less in return for damaged ones.
The shortage has partly been blamed on Bangladesh Bank’s decision earlier this year to stop distributing newly printed notes that feature the image of the country’s founding leader Sheikh Mujibur Rahman.
The move came just before Eid-ul-Fitr, a period when the demand for fresh notes typically spikes, local reports say.
According to dealers in Gulistan, even people from districts outside Dhaka are now travelling in to try to swap worn notes for cleaner ones.
But the dealers say supply is running low, and priority is being given to small business owners handling larger sums of money.
The central bank says it will release newly designed notes ahead of Eid-ul-Adha, but the process of replacing old currency will take several years.
Printing new designs, which began in May, takes time due to limited production capacity at the state-owned mint.
Banking authorities say around Tk374,000 crore is currently in circulation, with the majority held by the public but many of those notes are now in poor condition.
