Oftentimes, when people come across a torn Ghana cedi note, they begin thinking about how to get it exchanged. The instinct is understandable. Nobody wants to simply abandon money because the note carrying its value has been damaged. Money does not come easily to everyone.
Behind a GH¢200 note may be hours of work, a deal sealed, a fare earned from driving, or money carefully saved for something important. So when that same note is found torn, burnt or badly damaged, thoughts naturally begin to run through the mind about how to make the money useful again.
Two things usually come to mind. Some think of giving the note to a trotro conductor, hoping that the driver or vehicle owner will eventually use it to buy fuel at a filling station. That fact is quite notorious. Others decide to keep the note safely and take it to the bank, believing that it can be changed for a new one. That sounds sensible. After all, it is still money, and the damage does not necessarily mean that its value has disappeared. But must a damaged note always be replaced? If yes, must it be for its full value? What happens where only part of the note remains?
What the Law Says About Damaged Currency
The cedi and the pesewa constitute the currency of Ghana and are the country’s legal tender. Like any currency that moves constantly from one hand to another, Ghanaian notes and coins will inevitably suffer some degree of wear. Sometimes, however, the damage is more serious. A note may be torn, partially burnt, soaked, mutilated or otherwise rendered unsuitable for ordinary use.
As the central bank, the Bank of Ghana has the exclusive right to issue and redeem Ghanaian currency. The law also recognizes that currency cannot practically be managed from the central bank alone. Notes and coins move constantly through commercial banks, businesses, and the hands of the public.
Section 38 of the Bank of Ghana Act, 2002, Act 612, therefore allows the Bank of Ghana to appoint a banking institution to act as its agent for the issue, reissue, exchange, and withdrawal of currency notes and coins on terms agreed between the bank and that institution.
That provision helps explain the familiar practice of taking a damaged note to a commercial bank. A person does not necessarily have to make a trip to the Bank of Ghana every time a currency note becomes damaged. A banking institution that has been appointed as an agent of the Bank of Ghana is permitted by law to perform currency exchange functions within the arrangements made with the Bank of Ghana.
But the fact that a damaged note can be taken to a bank does not mean that every damaged note is automatically exchangeable for its full face value. Exchange here is not like the right to personal liberty or privacy that we often recite and demand from the authorities. By section 42 of the Act, a person is not entitled to recover from the Bank the value of a mutilated or imperfect currency note or a coin that has been tampered with. But as has been the life of the law, there are exceptions to this. The Governor is discretionarily empowered to permit the exchange of the amount of such currency as the Governor determines.
That provision changes the assumption that a damaged GH¢200 note is simply a GH¢200 note that the bank must replace. The possibility of exchange exists, but the law does not make full-value recovery from the Bank an automatic entitlement where the currency is mutilated or imperfect.
How the Damaged Note can be Changed
Knowing that a damaged note may be exchangeable is one thing. Knowing what to do when you actually have one is another.
The first thing is to keep the damaged currency. This may sound obvious, but a person who finds a badly burnt or torn note may be tempted to throw it away because it no longer looks useful. Whatever remains of the note should be kept together, especially where the note has been partially burnt or torn.
The serial numbers should also be identified and recorded where they are still visible. Each cedi note issued by the Bank of Ghana carries serial numbers on the note, and these can assist in establishing the identity of the damaged currency. Where a number is visible on only part of the note, that portion should be preserved carefully.
Where the damage results from a fire, the holder may also obtain a police extract. The report can record the circumstances, the serial numbers of the affected notes and the total amount involved. It provides supporting evidence when the damaged currency is subsequently presented for verification.
The next step may be to take the damaged notes, together with any supporting documentation, to a commercial bank. Because banking institutions may act as agents of the Bank of Ghana for currency exchange, the bank can receive the damaged currency and deal with it within the applicable arrangement.
Depending on the nature and extent of the damage, the bank may be able to handle the process itself or may direct the holder to the Bank of Ghana. In other cases, the commercial bank may forward or otherwise facilitate the submission of the currency for the necessary examination. The important point is that the holder does not need to assume that the only option is to walk directly into the Bank of Ghana.
Where a note has been completely reduced to ashes, however, the situation becomes much more difficult. There may be no physical currency left to identify or verify. A claim that a particular amount of cash was lost in a fire is different from having identifiable remains of the currency itself.
Conclusion
There is a simple lesson in all of this. A damaged note should not immediately be treated as worthless. At the same time, it should not be passed from one unsuspecting person to another simply because the holder wants to get rid of it.
If a note is torn, preserve it. If it is partially burnt, keep all the surviving portions together. If the serial numbers are visible, record them. If the damage arose from a fire, obtain the necessary supporting report. Then take the currency through the appropriate banking or Bank of Ghana process rather than leaving it in a drawer until the damage becomes impossible to verify.
The law gives the Bank of Ghana responsibility for the country’s currency and allows banking institutions to participate in its exchange. For mutilated and imperfect notes, however, section 42 makes clear that replacement is not an automatic right to the full face value. The condition of the currency and the applicable determination matter.
The better habit, therefore, is to treat the cedi with the same care with which we treat the money it represents. When a note begins to deteriorate, deal with it early. When it is damaged by accident, preserve what remains and take the necessary steps to have it assessed. And where coins or notes have been deliberately altered, remember that the law does not treat the conduct as harmless.
That torn GH¢200 note may still be worth something. The best way to find out is not to pass the problem to the next person, but to preserve the currency and let the proper process determine what can be done with it.
