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Queries on how CBK will destroy old notes linger

NEWS
By Grace Nganga | Oct 3rd 2019 | 3 min read
By Grace Nganga | October 3rd 2019
NEWS
A briquette is worth Sh1 million of crushed Sh1000 old currency notes. [Wilberforce Okwiri, Standard]

With the end of the demonetisation exercise, questions already abound on how the old Sh1,000 notes will be destroyed.

According to Central Bank Governor Patrick Njoroge, the notes will first be punched or stamped, just like it is done with old currencies.

Dr Njoroge was responding to questions from social media where people spent the whole of yesterday wondering how the old notes would be done away with.

After the punching, Njoroge said, the notes will then be shredded before being packed into briquettes that will eventually be disposed.

A briquette is a vase like object that can be used for fuel. “The old bank notes will be trashed through a secure process, put in a briquette and then disposed,” Njoroge said.

The governor was not very specific on the method to be used in disposing the notes, though he hinted that they might be burnt.

Mutilate notes

Central Banks all over the world follow the same process when doing away with old notes. They first mutilate before burning them.

For example, in the US, the Bureau of Engravings and Printings receives around 25,000 mutilated currencies annually. The bureau shreds and burns them.

Already, 219 million pieces of the old notes have been returned by Kenyans, according to CBK.

On social media, some individuals engaged in conjecture, arguing that when the returned notes are piled up, they would rise higher than Mount Everest, the World’s tallest mountain.

Njoroge sought to set the record straight. He said all the collected old notes could only fit into two, forty-foot containers.

The recall of Kenya’s old Sh1,000 notes was part of the Government’s plan to fight money laundering and corruption. “We thought about this transition for about three years; to basically deal with illicit financial flow in the country, and minimise the emergence of counterfeits,” Njoroge said.

“We looked at the experience of other countries and learned from them. We wanted to minimise the disruption to the economy while enhancing effectiveness.”

The four-month deadline saw a number of Kenyans go up and down trying to exchange the notes in banks.

Most businesses started rejecting them from as early as the second month.

Most people beat the last-minute rush, breaking the stereotype that Kenyans like fulfilling government directives in the last minutes, and more often will ask for additional time.

CBK had targeted to collect 217 million pieces of the old notes. However, it fell short of that target with eight million pieces, collecting 209 million pieces.  

Smooth process

“The process was smooth. This was something we had planned and prepared for,” Njoroge said.

“We were able to retrieve at least 83 per cent of our initial target. I can say we are proud of the outcome. Seventeen per cent, which is a total of Sh7.4 million, has not been recovered, but it will remain worthless.”

On September 30, the banks officially locked out any transaction of the old Sh1,000 notes to pave way for the new currency.

The CBK boss added that during the demonetisation, around 3,172 illegal transactions were flagged.

Njoroge warned people against attempting to forge the new banknotes, noting that they had improved security features.

The new generation banknotes were unveiled on June 1 during Madaraka Day.

They are in Sh50, Sh100, Sh200, Sh500 and Sh1,000 denominations.  

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