Explanatory Brief for Currency (Amendment) Bill
1 The Minister for Education, Mr Ong Ye Kung, on behalf of Mr Tharman Shanmugaratnam, Deputy Prime Minister and Minister-in-charge of the Monetary Authority of Singapore (“MAS”), today moved the Currency (Amendment) Bill (“the Bill”) for first reading in Parliament.
Legal Tender Limits for Coins
2 Under the Currency Act (Cap. 69) (“CA”), legal tender limits are placed on the amount of each coin denomination that can be used for payment. This is to minimise inconvenience to vendors and their waiting customers should a customer wish to tender a large quantity of low denomination coins for payment. The vendor is only obliged to accept payments up to these limits and may reject payments exceeding these limits. The existing limits are:
(a) in the case of coins of a denomination lower than 50 cents – for payment of an amount not exceeding $2; and
(b) in the case of coins of a denomination of 50-cents – for payment of an amount not exceeding $10.
3 MAS is introducing legislative amendments to section 13(3) of the CA to streamline the legal tender limits for coins to a uniform limit across denominations. This will bring convenience to users as the uniform limit is simple to remember and easy to implement. The uniform limit does not prevent a payee and payer from agreeing to transact using quantities of coins above the limit. Nevertheless, members of the public are encouraged to use less cash for payments for the convenience of the payee and the payer, in line with Singapore’s move towards an electronic payment society.
4 MAS’ 2017 public consultation on the proposal to revise the legal tender limits for coins received broad support to retain legal tender limits for coins, introduce a limit for the $1 coin and have a uniform limit across the denominations.
Use of Intelligent Banknote Neutralisation System (“IBNS”)
5 The Ministry of Home Affairs (“MHA”) intends to allow the use of IBNS for cash-in-transit (“CIT”) operations. These operations involve the physical transfer of cash between banks and banks’ corporate customers or for the replenishment of automated teller machines.
6 IBNS is a security system to deter robbery of cash by permanently damaging or defacing the currency notes housed within it using various methods (e.g. using indelible ink to permanently stain the notes) when the system detects an attempted attack. It is used during CIT operations in many countries in the European Union.
7 The Singapore Police Force (“SPF”) intends to license companies that sell IBNS or offer cash transportation services using IBNS as security service providers under the Private Security Industry Act (Cap. 250A) (“PSIA”). The use of IBNS can free up scarce armed Auxiliary Police Officers for more critical areas, such as infrastructure and border security.
8 As currency notes will be mutilated when IBNS is triggered, thereby contravening section 23(1) of the CA, MAS will amend section 23 of the CA to provide that a holder or applicant of a security service provider licence is not liable to be convicted of an offence for mutilation of currency notes under specified conditions relating to the use of IBNS.
KEY PROVISIONS IN THE BILL
9 The Bill will streamline the existing legal tender limits for coins to a uniform limit of 20 coins per denomination in a single payment. Compared to the existing limits, there will be:
(a) a new limit for $1 coins (currently no limit);
(b) no change in the limits for 10-cent and 50-cent coins;
(c) a reduction in the limit for 5-cent coins (currently 40); and
(d) an increase in the limit for 20-cent coins (currently 10).
10 The Bill will make clear that an IBNS-damaged note is deemed not legal tender, and exempt the following persons from the offence of mutilation of currency notes:
(a) a security service provider licensed under the PSIA who sells IBNS or who employs IBNS in carrying out CIT services, where currency notes are damaged by IBNS activation; and
(b) an applicant for a security service provider’s licence under the PSIA, where currency notes are damaged from trial or demonstration of IBNS that is required as part of the application.
11 To give effect to the above amendments relating to the use of IBNS, the Bill will also introduce the following related amendments to the PSIA:
(a) specify that a person who sells IBNS or employs IBNS in carrying out CIT services is providing a security service; and
(b) provide that an applicant for a security service provider’s licence must, at the request of the licensing officer, provide a trial or demonstration of the security service, or any equipment to be employed in carrying out any security service.