BoT to phase out Sh500 notes by end of this year

Dar es Salaam. The Sh500 bank note will be phased out by the end of this year, the Bank of Tanzania (BoT) said yesterday.

The note is being replaced by the Sh500 coin, BoT banking director Marcian Kobello told The Citizen yesterday.

He also said that the central bank was no longer issuing the Sh500 notes for circulation.

“The process of phasing out the note started way back in 2014 after it came to our attention that they were getting worn out rapidly as soon as they entered circulation…. Currently, we don’t have the stock of the Sh500 notes,” he said. Being a lower denomination note, the Sh500 gets worn out quickly because it is used more frequently as compared with other notes.

“This is why we decided to replace it with a coin which can last for at least 20 to 25 years….a note lasts for only six years,” he said.

Since the coin was launched three years ago, said Mr Kobello, the stock of the bank notes was coming to an end and they were currently increasing the coin circulation to enable the public get used to it.

According to him, the bank could not just destroy the bank notes despite the fact that most of them were worn out upon entering circulation as a lot of money was used to print the same.

“We could not abandon them as we had to get the value for money as we gradually introduced the coin,” he said.