Rupiah is a legal tender in Indonesia. Over time, Rupiah notes circulating in the community have deteriorated in quality, both physical and security. Bank Indonesia, as the central bank that regulates the circulation of money in Indonesia, has an obligation to ensure that the money circulating in the community is in good condition and safe.
One of the ways that Bank Indonesia does this is by destroying money that is no longer suitable for circulation. In this article, we will discuss the types of Rupiah money that are destroyed, the reasons why Bank Indonesia destroys Rupiah money, and the process of destroying the money.
Introducing the destroyed Rupiah Notes
The Rupiah that is destroyed by Bank Indonesia is generally money that is no longer suitable for circulation. The money can be in the form of banknotes or coins. Money that is not fit for circulation has several characteristics, such as money that is damaged, torn, faded, folded, or exposed to graffiti.
In addition, money suspected of being counterfeit will also be destroyed. Bank Indonesia will examine the incoming money to determine whether it meets the criteria for destruction or is still fit for circulation.
The reason why Bank Indonesia destroys Rupiah notes
Bank Indonesia destroys Rupiah notes that are not fit for circulation for several reasons:
First, to maintain the quality of money circulating in the community. Money that is damaged and unfit for circulation will disrupt the financial transaction process.
Second, to reduce the risk of counterfeit money circulation. By destroying money that is suspicious or proven to be counterfeit, Bank Indonesia helps prevent economic losses due to the circulation of counterfeit money.
Third, to maintain public confidence in the Rupiah. Good and safe money will maintain public confidence in the Rupiah as a legal tender.
Collection Process of Money to be Destroyed
Bank Indonesia has a strict procedure in collecting Rupiah notes to be destroyed. This process involves several stages from the selection of money at banks to the verification and selection of money at Bank Indonesia. The following are the steps in collecting the money to be destroyed.
1. Selection of Money in Banks
Commercial banks in Indonesia have the responsibility to screen money entering and leaving the banking system. They must ensure that the money circulating in the banking system is fit for circulation and undamaged. If a bank finds money that is not fit for circulation, such as torn, faded, or scribbled money, they will keep the money and send it to Bank Indonesia.
2. Remittance to Bank Indonesia
Commercial banks will send the money that has been selected and is not fit for circulation to Bank Indonesia. This is usually done periodically, depending on the amount of money the bank has collected. The money to be sent to Bank Indonesia must be accompanied by a document explaining the reason for sending the money, such as the physical condition of the money or suspicion of the authenticity of the money.
3. Verification and Selection of Money at Bank Indonesia
Once the money arrives at Bank Indonesia, it will be checked again by Bank Indonesia officers. They will verify the condition and authenticity of the money sent by commercial banks. If the money is indeed unfit for circulation and must be destroyed, Bank Indonesia will add it to the list of money to be destroyed.
Bank Indonesia’s Rupiah Destruction Process
The destruction of Rupiah notes that are unfit for circulation is carried out by Bank Indonesia with several strict methods and procedures. The following are some of the steps taken by Bank Indonesia in destroying Rupiah money that is not suitable for circulation.
1. Methods of Destruction
Bank Indonesia uses several methods of destroying money, such as shredding, burning, or mixing with chemicals. The method chosen depends on the amount and condition of the money to be destroyed. The purpose of destroying money is to remove the money from circulation and prevent the reuse of money that is not fit for circulation.
2. Supervision of the Destruction Process
The banknote destruction process at Bank Indonesia is supervised by a responsible officer to ensure that the process runs properly and in accordance with established procedures. This supervision includes examining the method of destruction, the process of counting the money to be destroyed, as well as supervising the security and safety of the environment during the destruction process.
3. Storage and Collection of Destruction Money
After the destruction process is complete, the destroyed money will be recorded and stored in the form of documents or electronic data.
This information includes the amount of money destroyed, the date of destruction, and the destruction method used. This data is used for reporting, analysis and monetary policy planning purposes by Bank Indonesia.
Bank Indonesia has an important role in overseeing the circulation of eligible and ineligible Rupiah notes in the community.
The process of destroying unfit Rupiah notes involves several stages, starting from the selection of money in banks, sending money to Bank Indonesia, to a strict and controlled destruction process. By destroying unfit notes, Bank Indonesia seeks to maintain the quality of Rupiah notes in circulation and ensure public confidence in the national currency.