New-look SA currency begins circulating

RETHABILE MOHONO

South African’s new-look currency started co-circulating with old currency last week and the Central Bank of Lesotho has advised the public that the South African Reserve Bank (SARB) has developed a new family of banknotes and coins (Version 6).  “This is a common tradition among central banks to upgrade or change their currencies after a period of five to ten (5-10) years of circulation/use,” the CBL said, adding that it is a best practice that is meant to preserve the integrity of a nation’s currency and to contain the inherent risks in the use of currency such as counterfeiting.

The updating of the currency comes after the Financial Action Task Force (FATF), an intergovernmental body that sets global standards to combat money laundering and terrorist financing, announced that SA is grey listed, joining the group of countries such as Syria, Haiti, Yemen and Mozambique. When a country is put on the grey list, it means that it is under increased monitoring by the FATF or that FATF has identified strategic deficiencies in its systems to counter financial crimes.

In earlier reports FATF published an evaluation of South Africa’s anti-money laundering measures, which found loopholes in the country’s policies and efforts to combat money laundering and terrorist financing, despite its financial system being highly vulnerable to these crimes. Before it was grey listed, FATF in its report recommended that South African authorities should come up with policies to address these higher risks of money laundering and terrorist financing and also recommended policy makers provide the Directorate for Priority Crime Investigation (the Hawks) with more staff, especially financial investigators and forensic accountants.

Among many reasons why SA was under scrutiny, the reports highlights that South Africa’s largest banks, which facilitate trillions of Rands in international fund transfers, are at a high risk. This risk was laid bare last year in a report by the Prudential Authority, which found that one of the SA’s largest banks indicated that it had 8 388 clients with unknown citizenship. One bank indicated it had 1 782 clients without a known country of incorporation.

It highlighted that the treasury and the Financial Intelligence Centre have started reviewing South Africa’s anti-money laundering and counter-terrorist financing legislation. The amendments to Financial Intelligence Centre Act (Fica) will widen its scope by including more categories of institutions and businesses that must report suspicious transactions. CBL also informed the public that SARB officially launched its new banknotes and coins on May 3 2023.

“The money began circulating both in the Republic of South Africa (RSA) and Lesotho from 4th May 2023. In this regard, both the old and new sets of Rand banknotes and coins shall remain legal tender in Lesotho, and shall be exchanged at face value only,” CBL says.  The upgraded Rand banknotes themed Version 6 will cover all denominations: R10, R20, R50, R100 and R200 together with the coins in 10c, 20c, 50c, R1, R2, and R5 further denominations. CBL further stated that it will continue to conduct awareness campaigns across the country to sensitise the public on the security features of these new Rand banknotes and coins.

CBL advises the public to visit the nearest commercial bank branch or the Central Bank of Lesotho for more information. Kuben Naidoo, Deputy Governor for the South African Reserve Bank, told media that the main reason for the upgrade is largely due to updated security features. He said that around seven or eight bank notes per one million in circulation are counterfeit. “Coins are also expected to see an update, however, this reason is mainly for a refresh of the artwork,” he said explaining that the front of SA coins has not been updated since 1989. Apart from that he indicated that 100% of the coins and 90% of notes are produced locally.” The South African Reserve Bank has a ‘business contingency agreement’ with a company in German as somewhat of a back-up plan, should something happen to the Reserve Bank in South Africa,” he adds.