New notes 'unrecognised' by ATMs and CRMs, blame game continues

Ahead of Eid-ul-Adha, the central bank released about Tk500 crore worth of new notes into the market. Initially, Tk20, Tk50, and Tk1,000 denominations were issued.

However, the new Tk1,000 note has created significant confusion and inconvenience. Many people have been unable to deposit the notes at CRM (Cash Recycling Machine) booths of various banks.

The machines fail to recognise the new notes and often reject them repeatedly – sometimes even treating them as paper and discarding them.

A video circulating on social media shows a customer failing to deposit the new note at a CRM booth, as the machine simply refuses to accept it.

When asked about the issue, Bangladesh Bank Executive Director and spokesperson Arif Hossain Khan told The Business Standard that it was purely a technical matter. "Once the new note's security features and characteristics are programmed into the CRM machines, they'll work fine. It usually takes a bank only 24 hours [to implement this]."

He added, "We've only supplied a limited quantity of the new notes to banks. Our target ahead of Eid was to get at least one new note into the market. Distribution is ongoing, and it will take a little more time before the notes are widely available."

He also explained, "We used to import raw materials for printing money from a century-old British company. When that company suddenly shut down, it caused some disruption. We're now sourcing these materials from a German company."

A senior official of the Security Printing Corporation (Bangladesh) Ltd, operated by Bangladesh Bank, told TBS that the real problem lies with the lack of initiative from banks. "The new notes' features are available with the central bank. Banks simply need to collect those and update their machines accordingly."

However, two managing directors of private banks, speaking anonymously, told TBS, "Before Eid-ul-Adha, the governor held a meeting with some banks' MDs and informed them that a small quantity of new notes would be circulated – and that these notes should not yet be placed in ATMs or CRMs.

"The governor also mentioned it might take until June to adjust the features and security settings of the new notes."

On the other hand, officials from the card divisions of several banks told TBS that it usually takes at least 2-3 months to adapt new notes for ATM and CRM machines. Without this adjustment, there is a risk of counterfeit notes slipping into the system.

Md Abed ur Rahman, vice president and Head of Cards at Midland Bank, told TBS, "To use new notes in ATMs or CRMs, the notes must first be 'taught' to the machines by creating a template. This template is usually developed by the machine's manufacturer. The entire process typically takes 2-3 months."

The head of cards division and deputy managing director of another bank said, "Bangladesh Bank has yet to provide the full set of security features of the new notes to banks. Some banks had requested to receive five bundles [2,000 notes] of Tk500 or Tk1,000 denominations a month before circulation for simulation purposes. Due to changes in design, size, security thread, and colour, these notes are currently undergoing simulation in Japan, which may take 2-3 months."

ATM or CRM machines use a scanning and scoring system – if a note matches 100% with the template, only then will it be accepted.

This template creation is typically done by the machine manufacturers – such as Japanese multinational Hitachi or American tech company NCR. Samples of the new notes must be sent to them, or their representatives come to Bangladesh to perform on-site testing.

Templates cannot be updated across all ATMs simultaneously. While some banks have terminal monitoring software, most do not. As a result, each machine must be updated with new software or templates individually.

Additionally, there are other technical issues related to depositing or withdrawing money – such as differences in note size and thickness, or dirty or damp notes. Machines use friction and suction technology to pick up notes, so even minor deviations can cause failures.