To improve the quality of the National Currency in circulation and at the time of payment avoid problems for the currency that is valid for payment, The National Bank of Georgia has formulated the new rules of defining the fitness criteria and rule of acceptance and replacement of GEL banknotes and coins.

According to the rule the categories for notes/coins valid and acceptable for payment were refined and simplified. The differences between the categories became more vivid and clear. Namely,

I Category – notes acceptable for payment, that have small defects (a tear, written words and sentences, stains, grease etc.), that does not actually change the bank note information. The coins that have small scratches and signs of corrosion but retain coloring and clear engraving;

II Category – notes acceptable for payment with considerable defects (tears, written words and sentences, stains, grease etc) that allows identification of the security features and denomination, as well as retains the original size. The coins that have considerable defects, grease and corrosion, but retain overall face, size, coloring and their identification is possible;

III Category – notes acceptable for payment, that have changed coloring, but identification is possible, notes that are torn and  mended, but the composing pieces are from the same banknote; notes that have any damages, but more than 50% of the original banknote are undamaged and can be identified. Coins, that have any damages, but more than 50% are undamaged and can be identified.

IV Category – damaged notes/coins not acceptable for payment, that do not meet the requirements set by the first three categories.

The new rule made the obligation to replace the damaged bank notes/coins after their identification more straightforward and the critical edge for damage was set “within 50%” instead of “no less than 52%” and identification of one of the serial number in force currently.

The notion of “deliberately damaged notes/coins” was abolished, since it caused confusion among the customers.

In accordance with the rule a non-commercial real entities can refuse to accept GEL banknotes and coins belonging to categories II, III and IV. Before now the rule applied only to banknotes and coins belonging to categories III and IV.

The new version obliges the commercial entities (besides commercial banks) and noncommercial legal entities to accept only GEL banknotes and coins belonging to categories I and II with the nominal value at the time of payment.

The rule obliges only commercial banks to accept GEL banknotes and coins belonging to categories I,  II, and III. They shall not put back into circulation banknotes and coins belonging to categories II, and III and ensure they are sent to the National Bank.

The National Bank allowed a case of National Bank of Georgia taking decision about the validity of a GEL banknote or coin for instances when a commercial bank is not able to determine whether a damaged bank note or coin belongs to the Category IV.

The provision related to the acceptance and replacement of the notes/coins belonging to Category IV was also amended to state that the bank notes and coins of the category are not subject to obligation of acceptance and replacement by the receiver and is returned to the owner upon request. When there is no possibility of returning to the owner, the commercial entities (apart from commercial banks) and noncommercial legal entities are obliged to deliver such legal tender to a commercial bank or the National Bank of Georgia without any payment. The commercial banks on their own deliver them to the National Bank of Georgia and without any payment, as well.