Unfit, Altered and Mutilated Bank Notes

Mutilated or Damaged Currency Notes

A currency note is mutilated when its original size of the note has been reduced / lost through wear and tear or otherwise torn, damaged, defaced, burnt, decomposed, shredded, contaminated, or perforated etc., through various actions. The condition of these notes requires special examination to determine its value. 

Wilfully Mutilated, Altered or Defaced Currency Notes

Mutilation, alteration or defacement of currency notes is an offence under the Central Bank of Sri Lanka Act No.16 of 2023, and is punishable by imprisonment or a fine or both.

Under the Regulation “E” issued by the Central Bank of Sri Lanka, no claim in respect of the wilfully mutilated or altered notes shall be entertained and such notes shall be retained by the Central Bank of Sri Lanka. The holders of these currency notes will have to suffer the loss of face value of such notes.

Central Bank's Role in Mutilated Note Redemption

The regulation “E” of Section 56 of the Monetary Law Act No.58 of 1949 gives the Central Bank of Sri Lanka the authority to refund the value of currency notes if they are damaged due to unavoidable circumstances such as by fire, floods and attack by insects and pests.

However, the value of damaged or mutilated currency notes are refunded as an act of grace and no holder is entitled as of right to claim refunds for such notes.
 

Refund Procedure of  Mutilated or Damaged Notes by the Central Bank of Sri Lanka

Refund procedures for mutilated or damaged notes are specified in the Central Bank of Sri Lanka Act No.16 of 2023 and redemption of value will be made strictly in terms of the instructions contained in the Act.

According to the Regulation E:

Conditions for refunding full value of a damaged/mutilated currency note

• The Note should be genuine.

• The remaining portion of the note should be at least ¾ the size of the original size of note.

• It should be possible to read in full at least one of the serial numbers.

• If the note has been torn to several pieces, it should be identifiable as pieces of one and the same note when adjoined together.

Conditions for refunding half value of a damaged/mutilated currency note

• The Note should be genuine.

• The remaining portion of the note should be not less than one half of the original size of the note and should be in one piece.

• The serial number should be complete and clearly identifiable.

 Special cases for refund will be considered on a case by case basis by CBSL.