$476m old $100 notes missing, Central Bank reports

Not all of the $100 cotton notes, during the conversion to polymer bills in 2019, were returned to the Central Bank which reports that an estimated $476 million is “missing.”

"By April 2020, 94.2 per cent of the estimated 81.7 million cotton notes that were in circulation were returned to the Central Bank. This means that missing money amounted to $476.5 million. Compared to the experiences of India and Kenya this was a significant proportion that was not returned," the bank said in the May 2020 monetary policy report.

The bank made the point that "not all the missing money would be illegal gains" as people did not meet the deadlines for redemption, while some "cash is being held as evidence in legal proceedings."

The bank said, a report on the demonetisation cited information from the Financial Intelligence Unit which indicates a significant rise in the number of suspicious activity transactions reports in the December 2019 to April 2020 period.

"Investigations into these reports will determine if persons/companies were engaged in tax evasion/money laundering or other illegal activities," it said.

On December 31, the bank red-flagged a pastor, Vinworth Dayal, who tried to convert some $29 million in cash for the new bills. He had showed up at the bank with 28 copy-paper boxes, each containing $1 million.

The cash was seized by Financial Investigations Bureau officers, who worked with the Financial Intelligence Unit (FIU) on the case. Police later seized an additional $2.5 million in different denominations when they searched his home and church, the Third Exodus Assembly Church on Depot Road, Longdenville. The pastor said he got the money from tithes.

In December 2019, Government and Central Bank announced the demonetisation of the $100 cotton note by December 31. The cotton $100 note was replaced by a polymer $100, which became legal tender in January 2020. After the December 31 deadline, the public was allowed to exchange their cotton notes at the Central Bank until April 1, 2020 once certain criteria were fulfilled.

In the monetary report, the bank said before the end of 2019, there was a significant increase in the value of deposits in commercial banks as people relinquished $100 cotton notes in their possession. "An increase in the number of deposit accounts was also noted, which suggested an increase in the level of financial inclusion in the country. The bulk of redemptions of $100 cotton notes at the Central Bank also occurred in the last two weeks of December 2019. By the beginning of 2020, currency in circulation had fallen significantly."