The Reserve Bank has concluded its Review of Banknote Distribution Arrangements. Today, it has released a Conclusions Paper setting out various changes that seek to ensure that banknote distribution is effective, efficient, sustainable and resilient – both now and into the future. This will help ensure Australians continue to have good access to cash.
The Review confirmed that declining volumes of banknotes being transported and processed has put pressure on the wholesale distribution network. The changes announced today are largely focussed on areas where the Reserve Bank has a direct relationship with the industry and are designed to support the industry to adapt as cash use by the public evolves.
The Reserve Bank will adopt the following package of changes relating to its arrangements with the industry for the purchase and return of banknotes and for managing the quality of banknotes in circulation. It will:
- Improve transparency of its banknote distribution arrangements by replacing existing contracts with a standard, publicly available set of terms and conditions for participants to access wholesale banknotes. An industry forum will be established to provide an avenue for communication with key stakeholders regarding these changes.
- Ensure that Australian banknotes in circulation continue to be of good quality, by increasing the maximum annual payment pool available to participants for quality sorting under the Note Quality Reward Scheme (NQRS). This will assist the industry to invest in new or upgraded equipment that is capable of quality sorting the Next Generation Banknote series.
- Increase the unfit banknote transport payment in recognition of the increasing unit cost of banknote transportation associated with the decline in cash use.
Assistant Governor (Business Services) Michelle McPhee said, 'I would like to thank stakeholders for their constructive engagement with the Bank throughout the Review. We will continue to work closely with them to implement these changes over time. We've chosen a balanced approach that will best support the industry so as to ensure cash continues to be available to those who want to use it.'
Background
The Review was initiated with the publication of an Issues Paper in November 2021. The Bank received submissions from 13 respondents and staff engaged with a wide range of stakeholders.
