As of June 6, 2016, currency note of Taka 5 denomination has been made public money, like Tk one and Tk two notes made so earlier, Finance Ministry sources said.
They said currently Tk 5 note and Tk 5 coin in circulation in the market which were issued by Bangladesh Bank amount Tk 400 crore each. From now on they will be treated as public money but banks will transact or receive them as earlier.
However, banks will not be liable to accept or refund money against Tk 5, Tk 2 and Tk 1 notes if they don't wish, the sources said. All public money notes are printed and circulated by the Finance Ministry with a nod from the central bank.From now on, Tk 5 paper notes will be signed by the Finance Secretary. Tk 5 notes will increase public money share in the market to 1.5 per cent from existing is 0.83 per cent.
Currently, Tk 5 notes are also signed by BB Governor along with the Finance Secretary. Henceforth, the public money notes will carry only one signature (of the finance secretary). For this, the Bangladesh coin order, 1972 will be amended, the sources said.
Finance Ministry said the move will significantly increase use of public money and boost people's buying capacity. However, use of Tk 1 and Tk 2 notes as well as paisa 1, 2, 5, 10, 25 and 50 coins has been decreasing in the country.
The value of one taka a couple of decades ago is now equal to 12.45 taka. So an old one taka can buy almost nothing in the current market. Even beggars refuse to take small denomination currency note or coin.
Two category notes are available worldwide for buying. One is bank note and other is public note. This system is available in Bangladesh. Bangladesh's public money involves one paisa, two paisa, five paisa, ten paisa, 25 paisa, 50 paisa, 100 paisa or one taka and two taka. Now, five taka has been included in this category.
Presently bank notes are of Tk 10, 20, 50, 100, 500 and 1000 denominations.
Subhankar Shaha, Executive Director of Bangladesh Bank, told the Daily Observer, presently the market has five taka coins worth 400 crore and five taka notes worth taka 400 crore each.
However, paper notes and coins available in the market from Bangladesh Bank amount to taka 93,150 crore. Of these, paper notes account for taka 92,354.40 crore. On the other hand, public money (notes and coins) available in the market now total taka 795.60 crore.
Finance Secretary Mahbub Ahmed told the Daily Observer, five taka notes being made public money will have no negative impact in the market. It will not raise inflation because when public notes enter the market, circulation of bank notes will reduce, he added.
