Currency management: banks told to implement well-lined strategy

The State Bank of Pakistan (SBP) Monday asked banks to fully implement currency management strategy by January 2, 2018. The State Bank developed and launched currency management strategy last year aimed at ensuring the availability of machine authenticated good quality banknotes to general public. While, announcing the strategy on Aug 26, 2015 for implementation, the SBP had directed banks that effective January 2, 2017, all banks will only disburse machine authenticated and sorted cash to clients and general public.
However, now, the central bank in consultation with Pakistan Banks Association (PBA) has decided to implement the strategy in two phases.
According to FD Circular No. 01-/2016, under the Phase-I, to be completed by 2nd January 2017, banks will implement the strategy in all branches in 30 big districts/cities based on presence of SBP-BSC office, number of bank branches and deposit size and requirement of disbursing machine authenticated cash will be applicable on banknote denominations of Rs 500 and above.
While under the Phase-Il, to be completed by 2nd January, 2018, banks will implement the strategy across the country for all denomination banknotes. In addition, banks will also ensure sealed cassettes based feeding of ATMs across the country. The SBP will appreciate if banks start sealed cassettes based feeding before the deadline, the circular said.
For the automated Cash Processing Centers (CPCs) to be established in existing branches, the banks may use existing vaults of the branches for storing CRC cash, provided the vaults meet the control requirements.
For selection of cash processing machines, the SBP will facilitate banks in assessing the capability of machines to sort and authenticate cash as per standards. The banks have been asked to finalise up to a maximum of three types (models) of machines that meet the SBP prescribed sorting/authentication standards and arrange a demo of the same at SBP BSC Karachi or Lahore offices. The banks may purchase any machine that satisfactorily sort and authenticate the banknotes as per the SBP sorting and authentication standards during the demo. The banks will ensure that the machine selection process on these lines, including the demo at the SBP, is completed by 30th June 2016, the circular added.