RBA program to redeem bushfire-damaged cash

Collect all the ‘banknote debris’, place in a sealed plastic bag labelled ‘bushfire’ then take it to your local bank.

Some badly damaged or contaminated notes may need to be forwarded to the Reserve Bank’s National Banknote Site for assessment.

The Reserve Bank has announced a program for redeeming banknotes destroyed in bushfires.

It comes as communities begin to return home to regions devastated by catastrophic bushfires, which to date have claimed about 1800 houses, with insurance losses approaching $1bn from more than 11,000 claims. Analysts expect the economic hit from the fires to top $5bn.

The RBA said the process for reimbursement involves only two steps: collecting all the “banknote debris” and placing it into a sealed plastic bag labelled “bushfire”; then taking the bag to any local bank branch.

The program enables most damaged notes to be analysed on the spot. Bank branch staff can place the banknote debris on a 100 cell grid: if the note is missing less than 20 per cent of its area, the bank pays the full value; if the result is greater than 80 per cent, the bank pays nil.

In between, the bank will pay out value in proportion with the percentage remaining – for example, half of a $10 banknote could be redeemed for $5. Payment figures will be rounded to the nearest whole dollar.

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Banknotes with significant pieces missing are classified as “incomplete”, and the reason they can’t be accepted at face value is because the RBA accounts for the fact that the missing piece could be redeemed separately.

However, the RBA can even assess cash that was damaged in a “tin, drawer, or wallet”. In some cases, “it might be easier to include the receptacle and its contents in the bag,” the RBA said.

National Bushfire Recovery Agency chief Andrew Colvin during a tour of the Hawkesbury Fire Control Centre in Wilberforce, Monday, January 13, 2020. Picture: AAP

An RBA spokeswoman told The Australian that, while difficult, it could analyse the ashes of burnt notes.

“The process of analysis is very complicated. We will work to analyse any banknote material that is submitted as part of a claim.

“We encourage the public to submit a claim even if their banknotes have been severely damaged.”

Some badly damaged or contaminated notes might need to be forwarded to the Reserve Bank’s National Banknote Site for assessment.

The RBA said its banknotes redemption program was always available to people, companies or government bodies affected by disaster, whether it be bushfires or floods, but the extent of the current catastrophe meant it was expecting a large response.

While it couldn’t predict the volume of claims expected from the ongoing catastrophe, the spokeswoman said redemption of damaged banknotes significantly increases in the aftermath of a natural disaster.

For example, of the $6.9m worth of damaged banknotes claimed in the 2018 financial year, $3.3m of those claims were from banknotes affected by floods during Cyclone Debbie.

In the 2019 financial year the RBA processed 15,009 claims, making $4.2m payments. The average claim was around $30.

It is a criminal offence to deliberately damage banknotes.