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South African Reserve Bank
 
 
     
 
 

Currency management 

The South African Reserve Bank Act Number 90 of 1989 governs the management of currency by the South African Reserve Bank. Currency management includes the following functions:

1. Issue of banknotes and coin
 
Availability of banknotes and coin

The Government has given the South African Reserve Bank the sole right to issue banknotes and coin in the country. However, all new designs of banknotes and coin must have the prior approval of the Government before it is placed into circulation. The Government also decides on the denominations that should be introduced or removed from circulation based on recommendations received from the Bank.
 
The Bank must ensure that sufficient new banknotes and coin are available to replace banknotes, which are removed from circulation due to soil levels.

The Bank calculates the country’s new banknote and coin requirements on an annual basis.

The Bank places new banknotes and coin into circulation on an on-going basis. New banknotes are automatically issued by the South African Reserve Bank's branches . Orders for new coin are placed with the Bank’s Head Office by the national specie committee, which is appointed by the commercial banks.

The value of banknotes and coin in circulation can be obtained from the Bank’s statement of assets and liabilities.
 
New banknote and coin design

The South African Reserve Bank undertakes projects for the design of new banknotes and coin as required.
 
2. Managing the quality of banknotes and coin in circulation
 
The quality of banknotes in circulation is managed in terms of Section 14 of the Bank's Act Number 90 of 1989 and is primarily based on two guidelines.
 
Firstly, the used banknotes issued by the branches of the Bank must be capable of being mechanically handled by cash receiving and/or dispensing machines.
 
Secondly, the quality of used banknotes should be acceptable to members of the public when paid to them by the tellers of commercial banks.
 
In order to manage the quality of banknotes placed into circulation, all banknotes deposited at the branches of the Bank are processed on electronic banknote processing machines.
 
The Bank ensures the availability and adequacy of banknotes and coin throughout the country.
 
The Bank will reimburse mutilated banknotes and coin which is not wilfully damaged. Such banknotes and coin can be deposited/exchanged at the commercial banks who will in turn forward them to the Bank for payment.
 
All South African banknotes and coin issued to date remain legal tender.
 
Previous series of banknotes and coin issues are withdrawn from circulation as they are deposited at the South African Reserve Bank.
 
Legal Tender
 
Legal tender refers to banknotes or coin that may be legally offered in payment of an obligation and that a creditor is obliged to accept.
 
Any amount in banknotes may be offered for payment. In the case of coin, the acceptable amount per individual transactions, is equal to the total amount, not exceeding the following:
  • fifty rand, where coin of the denomination of one rand or higher are so tendered;
  • five rand, where coin of denominations of ten cents up to and including fifty cents are so tendered;
  • fifty cents, where coin of the denomination of five cents or less are so tendered; and
  • the value of each coin so tendered shall be equal to the amount specified on that coin.
 The Bank has assumed liability in terms of section 15(3) (c) of the Currency and Banking Act 31 of 1920, for the legal tender of payment of an amount equal to the amount specified on the banknote.
 
Only an un-defaced and un-mutilated banknote or coin, which is lawfully in circulation in the Republic, shall be legal tender.
 
In the case of gold coin, the Bank will purchase such coin at the value of that which the South African Reserve Bank is willing to pay for gold coin on the day of such tender.
 
Mutilated banknotes
 
A banknote is mutilated when its condition is damaged by deterioration, fire or when it has been torn, defaced or has missing portions. Such banknote requires a special examination in order to determine its face value.
 
Guidelines for the payment of mutilated banknotes may be viewed under Public Awareness.
 
Mutilated coin
 
A coin is mutilated when its condition is damaged by deterioration, fire or when it has been partially destroyed.
 
The Bank shall according to the Bank's Act No. 90 of 1989, not be obliged to make any payment in respect of a coin which, in the opinion of the Bank, is mutilated or worn away and which may be tendered to it, but may, in its discretion, make a payment in respect of such coin.
 
The Bank shall not re-issue or cause to be re-issued any coin, which is mutilated or worn away in terms of the Act.
 
Wilfully mutilated coin
 
In terms of Section 14 of the Bank Act Number 90 of 1989, it is an offence to wilfully mutilate coin.
 
Dye Stained Banknotes
 
In terms of Section 34 (1)(f) of the Bank Act Number 90 of 1989 it is an offence to wilfully deface, soil or damage a banknote. Although devices deface banknotes, the South African Reserve Bank allows the use thereof as a means to deter robberies and theft.
 
Although currency protection devices (CPD's) deface banknotes, the Bank permits the use of CPD's as a means to protect currency against crime, to deter robberies/theft and to serve as a means of identifying proceeds of crime, as part of its constitutional and statutory obligation to protect the integrity and value of the currency.
 
Definitions
 
Dye-stained banknotes - refers to banknotes that have been stained with ink and/or smoke, or a combination of both, by the activation of a SARB approved currency protection device.
 
Controlled dye-stained banknotes - refers to banknotes which are dye-stained by the activation of a SARB approved currency protection device due to an accidental discharge and/or during a bona fide robbery or attempted heist where the banknotes are contained and/or recovered in a controlled manner by the user of the device.
 
Uncontrolled dye-stained banknotes - refers to dye-stained banknotes in circulation which land in the hands of the public as a result of theft of an activated currency protection device.
 
Information on dye stained banknotes may be viewed under Public Awareness.
 
 
 
 
     
 
 
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