The Bank of Israel today inaugurated its reform in currency operations. Under the reform, the commercial banks will handle most currency operations, setting up "currency centers" for this purpose.
The currency centers are required to use high-quality currency counting and sorting machines, which will greatly reduce the possibility of passing forged currency through the banking system to the public.
The Bank of Israel will grant the commercial banks and the Postal Bank permits to set up more than ten currency centers, which will regulate the flow of currency between the banks and between them and their customers. Currently, each bank deposits surplus currency with the Bank of Israel, and withdraws currency from it. The currency centers will undertake the bulk of the currency counting, sorting, and trade in surplus liquidity activity from the Bank of Israel.
The Bank of Israel's function will be reduced to its mandated role as the issuer of currency, including the destruction of damaged currency. The Bank of Israel is mandated to ensure the quality of currency held by the public, while the currency centers must deposit with the central bank all damaged coins and notes, as well as hand over any forged currency.
The Bank of Israel has established standards for measuring currency quality. Coins and notes that do not meet the standard (torn, sticky, overwritten, etc.) will be deposited with the central bank, which will replace the damaged notes and coins with new ones.
Published by Globes [online], Israel business news - www.globes-online.com - on October 1, 2009
© Copyright of Globes Publisher Itonut (1983) Ltd. 2009