* This story was first published in March 2020.
Cape Town - It has happened to us all, either accidentally or at the hands of a young child.
We've all experienced that moment when we realise our banknote is torn or ripped and we're left scrambling to come up with ways to retain its value.
After making inquiries with the South African Reserve Bank (SARB), there is more than what meet's the eye when it comes to torn, or as the banks call it, mutilated banknotes.
The SARB defines mutilated banknotes as: "A banknote is deemed mutilated when its condition requires special examination to consider the value, if any, to be paid. Such banknotes could be burnt, discoloured, decomposed, damaged with portions missing and/or contaminated."
SARB's Currency Integrity Enablement Officer, Tumelo Mopai, said that any one wishing to exchange mutilated banknotes are encouraged to "deposit at a Commercial Bank where they hold an account".
Mopai did say that people should take into consideration that banks use a standard payment criteria to pay out mutilated banknotes, and that not every bank renders this service.
Mopai referred to the South African Reserve Bank Act 90 of 1989, section 14 (4) that states “The Bank shall not be obliged to make any payment in respect of a torn banknote or a banknote which, in the opinion of the Bank, is mutilated and which may be tendered to it, but may, in its discretion, make a payment in respect of such banknote”.
TAKING TORN BANKNOTES AT FACE VALUE
The SARB has given a explanation on how mutilated banknotes are to be paid out and the breakdown all depends of how the note is torn:
- Full value - A mutilated banknote with two-thirds or more of the original note remaining may be paid at full value.
- Half value - A mutilated banknote with two-fifths or more but less than two-thirds of the original note remaining may be paid at half of the face value.
- No value - A mutilated banknote with less than two-fifths of the original note remaining has no value
Now, often times South African have also been known to use their ingenuity when it comes to money, and will use cellotape on torn bank notes.
Mopai addressed this by saying: "In circumstances where banknotes are accidentally torn, it is acceptable to repair them with cellotape.
"Furthermore, the onus remains with the Commercial Banks to authenticate such banknotes before accepting them."
Mopai added that the banks are also governed by their individual operational standards.
These are what the banks had to say on the matter:
Tshiwela Mhlantla, Managing Executive: Physical Channels, Retail and Business Bank SA: “At Absa, we strictly adhere to these [SARB] guidelines - in cases where tender is damaged, Absa will always accept a bank note/tender if it is legal, meets the SARB’s requirements and has visible serial numbers.”
Tsietsi Mahlasela from First National Bank said: “FNB will accept bank notes based of specific criteria as per the guidelines and information [from] the SARB.”
Capitec Bank added: “If damaged banknotes are issued from a Capitec Bank ATM, our clients can go to the nearest branch and give one of our consultants the note. We will then credit your account with the corresponding amount.”
Nedbank redirected our inquiry to the SARB.
Below is a list of Commercial Banks selected by the SARB to render these services and the payment criteria for mutilated banknotes.
