Impact of COVID-19 on Cash Operations in Malaysia

The year of the pandemic saw Bank Negara Malaysia (BNM) take a wide range of steps to ensure payments worked effectively, according to its 2020 Annual Report.

At the start of the pandemic there was a surge in demand for banknotes, an increase of 7.3% more notes in circulation over the year, and during the year BNM received 23% fewer notes back. It dealt with these changes by drawing down on its buffer stocks and working with the financial institutions and cash in transit (CIT) companies, which were declared as essential services, to ensure Malaysia’s 12,000 ATMs and cash cycle were properly stocked.

BNM processed 2.3 billion notes during the year, down from 2.9 billion in 2019. 23% of those notes were destroyed, slightly more than the 20% destroyed in 2019. A new act of parliament was introduced, the Currency Act 2020, which works alongside the 2009 Central Bank Malaysia Act. This includes the need for organisations involved in the collecting, sorting and packing of banknotes by quality, quantity and denomination to register as currency processors. The law allows BNM to introduce regulations relating to these organisations.