Fresh notes must be issued even if not for Eid

On March 10, 2025, Bangladesh Bank issued a circular instructing all its offices to refrain from distributing fresh notes to the public for the upcoming Eid-ul-Fitr and to conduct all transactions using recirculated notes. The same directive also applied to transactions among Bangladesh Bank officials and employees. This means that no fresh notes will be issued during the upcoming Eid. However, just a few days earlier, Bangladesh Bank had issued another circular stating that fresh notes would be issued from March 19. The contradiction between these two circulars suggests that Bangladesh Bank was forced to abandon its initial plan.

The primary reason for not issuing fresh notes is the decision to discontinue printing notes bearing the portrait of Bangabandhu Sheikh Mujibur Rahman. In most countries, national currency features portraits of founding leaders, monarchs, or renowned figures. Many Muslim countries, including Saudi Arabia, feature portraits of their kings on their banknotes. In those nations, despite political differences, there is a consensus on their founding leaders, ensuring that their portraits remain on banknotes regardless of government changes. However, in Bangladesh, Bangabandhu Sheikh Mujibur Rahman has not been universally accepted as the Father of the Nation. When the Awami League is in power, Bangabandhu is officially recognized as the Father of the Nation, but this recognition fades when they lose power. This pattern has persisted since the country's independence. The first parliamentary opposition leader, Abdul Kashem Mohammad Badruddoza Chowdhury (B. Chowdhury), refused to acknowledge Bangabandhu as the Father of the Nation during a parliamentary session.

The first official document of Bangladesh, the Declaration of Independence, refers to Bangabandhu Sheikh Mujibur Rahman as the "undisputed leader" of Bangladesh but does not call him the Father of the Nation. The 1972 Constitution also did not include Bangabandhu’s name or recognize him as the Father of the Nation. The phrase "Father of the Nation" first appeared in the Fourth Amendment in a different context, but no constitutional obligation was imposed to recognize him as such. While Awami League members and supporters verbally referred to Bangabandhu as the Father of the Nation, even during multiple Awami League administrations, no constitutional provision was made to formalize this recognition until 2011. The 15th Amendment to the Constitution in 2011 officially recognized Bangabandhu Sheikh Mujibur Rahman as the Father of the Nation and mandated the preservation and display of his portrait. Although the Supreme Court later nullified many provisions of the 15th Amendment, the constitutional recognition of Bangabandhu as the Father of the Nation was not overturned.

Historically, whenever the BNP came to power, it halted the production of banknotes featuring Bangabandhu’s portrait and issued redesigned notes. This time, the Awami League government has fallen due to a mass uprising, so it is expected that Sheikh Mujibur Rahman’s portrait will no longer appear on banknotes. The recent violent political changes have further diminished the chances of national consensus on the Father of the Nation issue. Therefore, removing Bangabandhu’s portrait from banknotes should have been planned from the outset. If such a plan had been implemented earlier, new banknotes with updated designs could have been introduced before Eid. While new designs for 2, 5, and 10 Taka notes (without intaglio ink) can be issued soon, it will take several more months to print the higher denomination notes that require intaglio printing. After Bangladesh's victory on December 16, 1971, a private company from London proposed printing banknotes for Bangladesh at the High Commission. However, due to a lack of foreign currency reserves, the offer was not considered.

Since the new designs will take time, Bangladesh Bank has already halted the production of banknotes bearing Bangabandhu’s portrait. However, a large stockpile of such notes still exists in the vaults of the Bangladesh Bank and the Security Printing Press. These notes are not being issued solely because they bear Bangabandhu’s portrait. This decision does not appear to be rational. Around three trillion Taka worth of notes featuring Bangabandhu’s portrait are still in circulation and will remain in the market for a long time. The only way to remove them completely would be to demonetize them, but that carries significant risks. The Bangladesh Security Printing Press lacks the capacity to replace all these notes immediately. India faced a similar crisis when it demonetized its 2000-rupee notes, as there were not enough replacement notes available for immediate distribution.

Since it is impossible to remove all portrait-bearing notes immediately, Bangladesh Bank should have considered issuing the already printed notes for Eid. The presence of a portrait on a banknote does not necessarily evoke strong emotions. After independence, Bangladesh continued using Pakistani banknotes featuring Muhammad Ali Jinnah’s portrait, simply stamping them with “Bangladesh.” Instead of ceasing to issue notes with portraits, Bangladesh Bank could have printed temporary alternative designs using existing master plates at the printing press. The availability of these master plates meant that interim designs could have been produced quickly until the new designs were ready. It is unclear why Bangladesh Bank and the Security Printing Press did not take this approach.

Bangladesh Bank has stated that it is moving away from the practice of issuing fresh notes during Eid to reduce costs. However, this decision is not particularly significant, and the central bank is unlikely to maintain this stance for long. Banknotes are regularly destroyed and replaced each year, and with the economy and remittance inflows growing, new notes will inevitably need to be issued. Unlike developed countries, Bangladesh cannot yet widely implement debit and credit card transactions. Therefore, currency production and issuance must continue, though the timing remains at Bangladesh Bank’s discretion. Since fresh notes must eventually be issued, doing so during Eid would be the most logical choice. Fresh notes are closely tied to Eid celebrations, allowing people to shop with new currency and making children happy with fresh-note Eid gifts. Denying this joy and tradition is unnecessary.

Bangladesh Bank cannot currently reduce costs by printing fewer notes. However, it can save money by reducing security features. The high-denomination notes (100, 500, and 1000 Taka) contain multiple security features, but not all of them are essential to prevent counterfeiting. These notes include OVI (Optically Variable Ink) on the upper right numeric value, which once accounted for 80% of the total printing cost. Since the patent for OVI ink expired after 30 years, it is no longer exclusive, making its continued use both risky and unnecessary. Due to its loss of patent protection, its price has dropped. Bangladesh Bank has already introduced superior security inks like Spark or Motion Ink in high-value notes. Therefore, OVI ink should be discontinued. It is uncertain whether this has been removed in the new banknote designs, but even if not, it can be eliminated at any time without altering the note’s overall design, significantly reducing costs.

Former Finance Minister M. Saifur Rahman introduced the Clean Note Policy under Governor Dr. Fakhruddin Ahmed, which aimed to remove old, dirty notes from circulation and replace them with fresh notes. To implement this, the Security Printing Press worked 24/7 to double note production. Saifur Rahman had ordered the removal of dirty notes due to their potential to carry germs. However, Bangladesh Bank has now shifted its policy to prioritize recirculated notes over fresh notes. If the new designs are delayed, Bangladesh Bank may eventually have to issue even unfit notes. With three trillion Taka worth of portrait-bearing notes in circulation, issuing only 200 to 300 billion Taka in fresh notes for Eid would have had a negligible impact. Since fresh notes will no longer be issued for Eid, the already printed ones will now have to be destroyed, along with the imported portrait-bearing watermark paper and specialized intaglio ink, resulting in the wastage of hundreds of billions of Taka. This loss could have been avoided by issuing fresh notes for the upcoming Eid.

Ziauddin Ahmed: Former Executive Director, Bangladesh Bank.