M29-Cash Handling - Clean Note Policy - Updated

Title: Cash Handling/ Clean
Note Policy
The Competencies Needed to be a Bank Teller
The key competencies of a Bank

teller can be divided into three
sections
Potential
Social Cognitive Job
Intelligence Abilities Performanc
e
Social Intelligence
• Kind/Cordial Tellers Regularly Interact With People – both customers as well as co-
workers. As a representative of the bank, it’s important for the tellers to be pleasant,
tactful, and caring.
• Communication Skills – When interacting with customers, it’s of utmost importance to
listen closely and carefully. In addition to making your customers feel that they are cared
for, listening to your customers will also help you to understand their needs. You should
also know how to converse with customers – addressing the customer and establishing
rapport, maintaining pleasant conversation and coping with difficult situations such as
unreasonable requests or interactions with angry customers.
Social Intelligence
• Confidentiality – Respect your customer’s privacy and make sure that sensitive
information remains confidential.
• Empathy - Understand your customer's feelings and his or her situation.
• Teamwork – Tellers function as part of a team. Be helpful, cooperative, and remember
that the way you do your job affects your teammates.
• Working Under A Supervisor – It’s important to build a good relationship with your
supervisor and to have his or her support. Ask your supervisor for advice and also make
suggestions, with regard to whatever the situation may be. Be sure to be a respectful
and loyal employee and team member.
Cognitive Abilities
• Judgment – Tellers often face conflicts which require them to prioritize and make
decisions.
• Decision Making – When facing such conflicts or helping customers with problems,
tellers need to analyze the issue at hand and find solutions that address the customer’s
needs while adhering to the bank’s policies.
• Accuracy And Attention To Details – The teller’s job requires precision, thoroughness,
and accuracy in order to avoid errors.
• Be Alert - Tellers must be alert and attentive to any suspicious signs indicating fraud.
Cognitive Abilities
• Work Habits – Since efficiency and punctuality are vital for being a good teller, it’s
important to work in an organized and orderly manner and to maintain an organized
work environment.
• Working Quickly – Since customers appreciate short waiting times, tellers need to
efficiently balance thoroughness, precision, and working swiftly.
Potential Job Performance
• Conscientiousness – Have the desire to be a good, hard-working employee. Be thorough
when you take action and make sure customers understand the information which
tellers provide to them.
• Follow Procedures –Financial institutions, such as banks, have many regulations and
procedures. It is crucial to be familiar with these regulations and procedures and how to
properly maintain them. This includes knowing which rules are strict and which are
flexible. An irregular situation may arise and you may want to ask your supervisor to
make an exception for the customer in question.
• Loyalty To The Bank – Being a representative of the bank, thus, maintaining customer
satisfaction as well as the bank’s interests is essential.
• Stress Tolerance – A bank can sometimes be a stressful environment. When faced with
a long line or a difficult customer, it is important to maintain a high level of
professionalism and remain calm. When working with customers or co-workers, be able
to take criticism and learn from it.
• Openness To New Experiences – Be creative, flexible, and able adapt to a constantly
evolving environment.
• Be Proactive – Go the extra mile. When coping with a problem, find creative solutions
and be sure to follow up on the problem.
• Be A Salesperson – As a teller, it is part of the job to sell services that the bank provides.
The best way to do this is to address the customer's needs – offer the customer a
service that will solve a problem or inconvenience or will simply make banking easier
according to each customer's individual needs.
• Be Knowledgeable – Become an expert in the banking field: be familiar with the bank’s
services and procedures. This will save a teller’s time, enabling to better answer
questions, and avoid making mistakes.
Purpose of Clean Note Policy
The purpose of Clean Note Policy was to ensure that the notes in circulation should be of
acceptable quality and there is also restriction of specific activities which make the bank
notes unacceptable i.e. writing political slogan on notes, or defacing etc.
Following strategy has been designed and implemented by SBP-BSC for its clean note
policy:
 Simplification of Various Procedures

 On-site Examination, Automation
 Public Awareness Program
 Simplification of Various Procedures:
The categorization of claim or defective or soiled note has been redefined in order to
ensure quick disposal of such notes.
 On-site Examination, Automation:

In order to comply with the instructions issued by the Accounts Department of BSC on
5th March 2004, all field officers are conducting on-site examination of designated
branched of commercial banks to ensure meticulous compliance of SBP/ BSC directive
with regard to “Clean Note Policy” such as distribution of fresh notes to the bonafide
members of the public or clients as well as soiled and defective notes are not in
circulation.
 Public Awareness Program:
To redress growing complaints of customers with regard to commercial banks refusal
for acceptance of small denomination banknotes and soiled or mutilated currency
notes, the commercial banks have been directed to display Public Notice(s) outside
and inside their branches at the prominent places indicating that “Small
denomination banknotes and soiled or mutilated currency notes are accepted here
for exchange purposes”.
Defective, mutilated, mismatched and notes disfigured by oil or any other substance in
such a manner as to render their identification doubtful should not be included in the
balance meant for payments to the clients/public
Clean Note Policy – Goals and Objectives
Banking Policy & Regulations Department of State Bank of Pakistan in January 2010 issues
a circular stating Clean Note Policy to the banks of Pakistan. The key focus of the policy is
to overcome the problems relating to collection, sorting and replacement of soiled notes
and to provide better services to general public.
As per the policy all bank are to ensure the following;
a) Branches have been preparing and maintaining the prescribed statement of daily
closing cash balances.
b) Branches have been maintaining minimum One day’s fresh / re-issuable balance in
accordance with the average daily cash payment requirements except of the branches
which are exempted from this condition:
• Branches making an average daily payment of less than Rs. 0.50 million.
• Branches having immediate access to re-issuable good quality currency notes such
as withdrawal facility from the large branch of the same bank in the same city, SBP
BSC local Offices/ NBP Chests.
c) Branches have been properly sorting Bank Note packets/ bundles into issuable/ non-
issuable as per SBP BSC standards and no instances have been observed where non-
issuable notes/ packets are being put into circulation by the branches.
d) Branches have been making arrangements for on spot sorting of bank notes over the
counter, in case where average daily payment is exceeding Rs. 1.50 million.
e) Branches have been affixing Sorted stamps on packets of issuable / non-issuable bank
notes of either description “ISSUABLE” or “SOILED”.
f) Branches have been accepting small denomination bank notes of Rs. 5/-, Rs. 10/- &
Rs. 20/- as well as cut / soiled / mutilated and defective currency notes of all
denominations.
g) Branches have been removing staple pins from re-issuable packets of all
denominations.
h) Branches have been banding packets of all denomination Bank Notes.
i) Branches have been following the procedure for issuance of fresh currency to general
public / stakeholders, as issued by SBP BSC (Bank).
j) Branches have been maintaining sufficient stock of coins of Re 1, Rs 2 and Rs.5/-
denominations.
k) Branches have been accepting coins and are providing notes-coins exchange facility.
l) There are no forged notes in branch balances or ATM.
m) Branches have not been repeating the irregularities pointed out in the previous
report.
n) Branches have not been using strong room/ vault for other purposes like record
room, kitchen, stationery store etc.
Counterfeit Notes
A counterfeit is an imitation that is made with intent to dishonestly
represent its content or original.
The word counterfeit most frequently describes forged money or document.
Counterfeit money is currency that is produced without the legal sanction of

the state or government.
How to Spot Counterfeit Currency
 Look at the Note
 Feel the Note
 Look at the Print
 Feel the Print
 Endeavour to Tear the Note.
 Hold the Note up to the Light
 Use Magnifying Glass.
 Use Ultra-violet Lamp.

Tools for Counterfeit Detection
 Ultraviolet Lamps
 Counterfeit Detecting Machines
 Magnifiers
Most effective tool to recognize a genuine Currency Note is
Your Finger’s tips

Security Features of Currency Notes
There are two types of security features i.e. visible (with naked eye) and invisible. Some
of the salient security features of the Bank notes are as under: -
Visible Features Invisible Features
• Quality Paper • Quaid-e-Azam portrait on the back of

• Print Quality bank notes.
• Security Thread • Anti Photographic rainbow tint.
• Water Mark
• Micro printing on security thread
• Embedded Fluorescent
• Intaglio printing
Categories of Security Features Used in Bank Notes
Security features used in Pakistani Bank Note may also be classified as:
 Overt
 (for the public)
Recognizable by general public with no special knowledge.
 Semi-Covert
 (for cashier and bank staff)
Recognizable by trained staff with the use of simple equipment like Ultra Violet lamp
or magnifying lens.
 Covert (Forensic)
 (for laboratory, agencies & SBP)
Features recognized by highly trained experts using special equipments like
Microscope, Spectroscope, special frequency UV lamps and chemicals. Machine
readable features are also included in this category.
Components and Configuration of a Genuine Currency Note
What is Substrate?
 Substrate is the material upon which a Currency Note or other Monitory Paper is
printed.
 Such Monitory Paper can be Prize Bonds, Stamps, Stamped Paper or other
Commercial Paper.
 It has two components

• Cotton Paper
• Polymer
Types of Paper Used for Bank Notes

Commercial Paper
 Smooth Surface
 Weak in strength
 Weak folding edges / endurance
 Easily torn-able
 No endurance after washing
 No potential against Burning
 Lesser grammage
 Bright in UVL
 No embedded fiber particles fluorescent in UVL

Cotton Paper
 Bank note paper is made of cotton pulp
 Durable
 Greater folding endurance
 Rough surface
 High grammage
 Stiff and strong
 Survival after washing
 Paper dull in UVL
 Embedded fiber particles fluorescent in UVL

Polymer Bank Note
 Made from polymer biaxially-oriented polypropylene (BOPP) which greatly
enhances durability and harder to tear bank notes and water proof.
 First issued by the reserve bank of Australia in 1988
 As of 2011, eight (8) countries have converted fully to polymer bank note
• Australia, Bermuda, Brunei, New Zealand, Nicargua, Romania, Vietnam, Papua New Guinea,
others are Bangladesh, Brazil, Chile, Indonesia, Honk Kong, Israel, Malaysia, Singapore,
Mexico, Nepal, Sri Lanka, Thailand, Samoa and Zambia
Know Your Currency

Note - Rs. 5000
Size 65 x 163 mm
Color Mustard
Issue Date 27-05-2006
Shah Faisal Mosque

Back Vignette Islamabad
1. Enlarged Watermark
2. Electrotype Watermark
3. Window Security Thread
4. Portrait
5. Flag with Color Shifting
6. Braille Feature
7. Year of Production
8. Number
9. Promissory & Guarantee Clause
10.Latent Image
11.Geometrical Patterns
12.See Through
13.Intaglio Lines
14.Anti Scan & Anti Copy
15.Denomination Numeral in English & Urdu
16.Micro Lettering Denomination Numeral
17.Vignette
The Picture and name of Faisal Mosque, Islamabad appear at

the reverse of the note.
18.Name of the Location
The words ‘FAISAL MOSQUE, ISLAMABAD’ appear vertically at

the reverse left bottom of the note.
19.Insignia
The seal of the ‘State Bank of Pakistan’ appears at the reverse

left bottom of the note.
20.Name of the Location
The words ‘STATE BANK OF PAKISTAN’ appear at the reverse

center top of the note.
21.Value in Words
The value in words ‘FIVE THOUSAND RUPEES’ appears in a

panel at the reverse off-center bottom of the note.
22.Husool-e-Rizq Halal Ibadat Hai
The words “ ” appear in a round design at the

reverse upper left of the note.
Know Your Currency

Note - Rs. 1000
Size 65 x 155 mm
Color Dark Blue
Islamia College
Back Vignette Peshawar
Know Your Currency

Note - Rs. 500
Size 65 x 147 mm
Color Green
Badshahi Mosque
Back Vignette Lahore
Know Your Currency

Note - Rs. 100
Size 65 x 139 mm
Color Red
Back Vignette Ziarat Residency

Know Your Currency

Note - Rs. 50
Size 65 x 131 mm
Color Purple
Back Vignette Karakoram Peak

Know Your Currency

Note - Rs. 20
Size 65 x 123 mm
Color Orange Green
Back Vignette Moen Jo Daro

Know Your Currency

Note - Rs. 10
Size 65 x 115 mm
Color Green
Back Vignette Gate of Khyber

Cash Management
Currency Management is a broad term that encompasses all areas
right from designing of notes to issue and distribution. Besides, it
deals with the inventory management of notes, withdrawal of
soiled notes from circulation and their disposal, mechanization of
notes processing and eco-friendly destruction of soiled notes,
exchange of notes, anti counterfeit measures and promotion of
good notes culture among the masses.
Procedure for Cash Payment
• Customer / Bearer
• Signature on reverse of cheque
• Scrutiny of the cheque
• Cheque of illiterate person
• Call back
• Verification of signature
• Teller’s limit
• Defacing cheque
• 2nd signature
• Denomination & stamping
Categories of Currency Notes
Following are the different categories of currency notes:
Fresh Notes
Re-issuable Notes
Soiled Notes
Clear Payable Defective Notes
Mutilated and Claim Notes

 Fresh Notes:
Currency notes that are issues for the first time after receipt form Pakistan Security
Printing Press.
 Re-issuable Notes:
Currency notes in good physical condition and free from any defect like alteration, cut,
mismatch etc. being issued after sorting as good quality re-issuable notes.
 Soiled Notes:
Currency notes which become dirty and limp due to
excessive use are defined as Soiled notes. Double
number note cut into two pieces either horizontally
or vertically but on which both the number are
intact is now being treated as soiled notes.
 Clear Payable Defective Notes:

Partially cut, damaged or slightly burnt notes provided 3/4th portion thereof be intact
are classified as clear payable notes.
 Mutilated and Claim Notes:
The notes which are oily, torn into many pieces, disfigured, burnt, washed, eaten by
white ants etc. are classified as claim notes that can be tendered at all field offices of
SBP BSC and commercial bank branches to obtain exchange value.
Note Refund Regulation
The values of following notes are not payable under the Note Refund Regulations:
• Less than half of a full note.
• Found to be forged
• Deliberately cut, mutilated or tampered.
• Carrying any message of a political character
• Portrait of Quaid-e-Azam is desecrated.
• Cancelled by any Field Office of the SBP BSC, NBP Chest, nominated Commercial Bank or
against which the value has already been paid.
The unfit notes after cancellation are put into verification, the same are sent for destruction by
burning in the incinerator / destruction in the note shredding machine locally manufactured
shredding machines.
Branch can surrender the counterfeit note to the CPC/ main branch who can deposit the same
with the SBP BSC office.
Frequent Irregularities Causing Penalties
 Daily cash statement not prepared as per directives of SBP.
 Soiled / defective notes were found mixed with the issuable notes meant for issuance
to public.
 Some packets were seen affixed -sorted stamp but soiled / defective were found
therein.
 Branches were meeting cash requirements by pushing back unsorted notes received
over the counter.
 Packets sorted but branch “sorted” stamped not affixed.

SBP Penalties on CPC/ Branches
Description Penalty per Instance Penalty per Unit in RS.
Issuance of Unauthenticated and 100,000/- N/A
Unprocessed banknotes to public.
Packets and bundles are not prepared/
packed as per requisite specification. N/A
20,000/-
The Vault does not have insurance cover 10,000/- N/A
in line with value of cash held.
The Entire CPC / Sorting
The entire CPC/ Sorting area is not area is not covered by
covered by high resolution CCTV cameras. 20,000/- high resolution CCTV
cameras.
Recording of CCTV camera is not available N/A 10,000/- Per day.
for three months.
Penalties on Cash Management
Nature of Violation Scale of Penalties
For not maintaining statement of daily closing Rs.5,000/- per instance plus Rs.500/- per day
cash balance. the default continue.
Maintenance of minimum One Day’s fresh re-
issuable balance in average daily cash payment Rs.5,000/- per instance plus Rs.500/- per day
requirements. during which the default continue.
For Not properly sorting Bank Note Rs.5,000/- per instance plus Rs.500/- per
Packets/Bundle-issuable/ Non-issuable condition packet of un-sorted / non-issue able currency
over the payment counter. notes of any denomination.
For Spot sorting of bank notes over the counter
in case where average daily payment is exceeding Rs.5,000/- per instance.
Rs.1.50 million.
Penalties on Cash Management
Nature of Violation Scale of Penalties
For not affixing “SORTED” stamps on packet of Rs.500/- per packet of any denomination if
bank notes. caught during on site examination.
For not accepting small denomination bank notes
of Rs.5/-, 10/- & 20/- as well as Cut / Soiled / Rs.10,000/- per case with evidence.
Mutilated & Defective.
For not removing the Staple Pins from packet of
all denomination bank notes and not properly Rs.500/- per packet.
banding.
How to Avoid Penalties
 State bank of Pakistan Accounts Department circulars no. 1 and 02 dated the 5th
March 2004 should be thoroughly studied.
 The instructions laid down should be followed in letter and spirit.
 The copies of above circulars have been sent to all the banks.
 Have a clear concept of the categories of notes.

National Prize Bonds – Sale/ Purchase
 Branches are required to maintain denomination wise register of National Prize
Bonds.
 National Prize Bonds are sold to customers against cash / cheque (drawn on the same
branch or remote branch).
 The CT / Teller counts cash or scrutinizes cheque for its:

• Validity (Stale/post dated).
• Amount in words / figures agree.
• Cheque is bearer and does not bear any endorsement.
• Cheque is not mutilated.
• Alteration/addition/cutting, if any, is confirmed by customer.
National Prize Bonds – Sale/ Purchase
 The CT/ Teller confirms title of account (if mentioned on Cheque) & number and
posts debit in the system against balance available in the relevant account. Detail of
NPBs denomination issued is mentioned on the reverse of the cheque.
 All the transactions will be posted/supervised instantly.

Detect Tampering of Prize Bond Numbers
Tampering usually carried out in the bond numbers and issue stamp. Tampering in bond
number can be detected as:
 While entering the bond number into the system.
 Magnifying Glasses.
 Under UV/ IR Lamp.
 Through Local Expert
Finally, forwarded to PSPC, if unable to detect from the above.

Cash Automation
Cash Automation is an essential part of cash handling. While automation takes many
different forms, it usually involves adopting several different kinds of machines. These
machines then work in tandem with your policies and processes to improve Cash
Management
How Do You Automate Cash Management and Handling:

When it comes to automating your cash handling, that means adopting the right cash
management technologies.
 Cash Counters
 Cash Discriminators
 Coin and Bank Note Recyclers

Cash Automation
 Cash Counters:
One of the simplest solutions available is a cash counter. This
machine does exactly what the name implies. It automatically
counts cash. Using this device can help you reduce the time
you and your employees spend manually counting cash. It also
improves accuracy.
 Cash Discriminators:
A cash discriminator is a slightly more sophisticated solution for
managing your cash. Like the cash counter, it can tally up your
cash. In addition, it will sort bank notes and coins for you. Again,
this helps you and your team get back some of your time and
reduce manual counting and sorting. It can also help you prepare
bank deposits.
Cash Automation
 Coin and Bank Note Recyclers:
A coin and bank note recycler is one of the most sophisticated
solutions you can adopt. It usually works at the point of
service, automatically tallying cash as it’s accepted by cashiers.
This virtually eliminates the need to count cash manually. It
also maintains an audit trail, making it easy to trace back
shortages and cashier errors. Preparing cash drawers and
tracking tips is a breeze when one of these machines is in use.
As the name implies, it also recycles cash: The same money
going into the machine comes back out for future transactions.
ATM Feed
• In Pakistan, ATMs are usually come with three cash cassettes containing different
denominations of currency notes.
• Machines do not recognize the denomination, it is therefore important the cassettes

should be refilled with the dedicated denominations. For example cash Cassette-1
meant for 100 note should be refilled with the same denomination every time.
• It is important to examine and check if the cassettes have been refilled accordingly.
In the absence of subject control, the machine will start disbursing wrong
denomination.
• Security of cassettes should be checked properly for any unauthorized

locking/unlocking
Thank You

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Title: Cash Handling/ Clean

The key competencies of a Bank

 Simplification of Various Procedures

 On-site Examination, Automation:

As per the policy all bank are to ensure the following;

h) Branches have been banding packets of all denomination Bank Notes.

l) There are no forged notes in branch balances or ATM.

The word counterfeit most frequently describes forged money or document.

Counterfeit money is currency that is produced without the legal sanction of

 Feel the Note

 Look at the Print

 Feel the Print

 Endeavour to Tear the Note.

 Hold the Note up to the Light

 Use Magnifying Glass.

 Use Ultra-violet Lamp.

 Counterfeit Detecting Machines

Most effective tool to recognize a genuine Currency Note is

Your Finger’s tips

Visible Features Invisible Features

• Quality Paper • Quaid-e-Azam portrait on the back of

 It has two components

Types of Paper Used for Bank Notes

Types of Paper Used for Bank Notes

Types of Paper Used for Bank Notes

 First issued by the reserve bank of Australia in 1988

Know Your Currency

Issue Date 27-05-2006

Shah Faisal Mosque

The Picture and name of Faisal Mosque, Islamabad appear at

18.Name of the Location

The words ‘FAISAL MOSQUE, ISLAMABAD’ appear vertically at

The seal of the ‘State Bank of Pakistan’ appears at the reverse

20.Name of the Location

The words ‘STATE BANK OF PAKISTAN’ appear at the reverse

The value in words ‘FIVE THOUSAND RUPEES’ appears in a

22.Husool-e-Rizq Halal Ibadat Hai

The words “ ” appear in a round design at the

Know Your Currency

Color Dark Blue

Issue Date 26-02-2007

Know Your Currency

Issue Date 11-11-2006

Know Your Currency

Issue Date 11-11-2006

Back Vignette Ziarat Residency

Know Your Currency

Issue Date 08-07-2008

Back Vignette Karakoram Peak

Know Your Currency

Color Orange Green

Issue Date 22-03-2008

Back Vignette Moen Jo Daro

Know Your Currency

Issue Date 27-05-2006

Back Vignette Gate of Khyber

Clear Payable Defective Notes

Mutilated and Claim Notes