Staff Correspondent:

The Bangladesh Bank (BB) has released more than 100 million new banknotes since June 1 this year, but those are hardly seen in the market. The new notes do not contain Sheikh Mujibur Rahman’s portrait.

The central bank began issuing notes of Tk 1,000, Tk 50, and Tk 20 denominations in early June, followed by Tk 100 on August 12.

So far, 36.2 million pieces of Tk 20, 39.2 million of Tk 50, 25 million of Tk 1,000, and 0.1 million of Tk 100 notes have been released.

People familiar with the matter say two factors may be driving the scarcity – people’s psychological tendency to hold onto new notes and limited supply relative to demand.

Another possible reason is that some currency traders in major cities may have taken possession of a portion of the supply in collusion with vested groups. As a result, the public continues to rely heavily on old and worn-out notes.

Bangladesh Bank Spokesperson Mohammad Shahriar Siddiqui said new notes were still being printed by Security Printing Corporation (Bangladesh) in Gazipur.

He said notes of additional denominations were underway.

The corporation produces 1.2-1.3 billion pieces of currency annually, alongside stamps and security papers.

Critics allege the central bank favours issuing high-denomination notes to boost seigniorage – the profit that a government makes from printing its own money.

High-denomination notes, such as Tk 1,000, yield greater margins than lower ones like Tk 10.

Mr Siddiqui, also a director of the central bank’s financial stability department, denied the allegation, arguing that issuance depends solely on market demand.

He declined to comment on allegations of collusion between traders and vested groups.

After notes are printed, the executive director (currency) orders to remit those to the central bank offices on the basis of demand.

The Bangladesh Bank, after receiving the notes, distributes those among Sonali Bank and other commercial banks.

Top executives of commercial banks told Journalist the circulation of new notes remained negligible than the demand.

They argued that there was growing demand for new notes without the portrait of Sheikh Mujibur Rahman and the central bank might have procured notes from abroad to meet that.

“The circulation of new notes is negligible than the demand,” said Syed Mahbubur Rahman, managing director and CEO of Mutual Trust Bank.

The Bangladesh Bank at its board meeting included in the agenda the note refund regulation 2025. The regulation is related to damaged notes.