The country is facing growing disruption in everyday transactions as a shortage of usable small denomination banknotes leaves businesses and commuters struggling, particularly in urban markets.
Across Dhaka, traders say worn-out, torn and unusable notes are becoming increasingly common, while fresh supplies of smaller denominations remain scarce. The problem has intensified since the 2024 political transition, when the interim government halted the printing of banknotes bearing the image of Sheikh Mujibur Rahman and moved to introduce new designs. However, sufficient quantities of the new notes have yet to reach circulation.
For small business owners, the impact is immediate and tangible. At a pharmacy in the Eskaton area, shopkeeper Md Sabuj says the lack of five, ten and twenty taka notes has made it difficult to manage daily transactions. Despite approaching multiple banks, he says he has been unable to secure adequate supplies of change.
The situation is particularly severe among informal and low-income traders, who rely heavily on small cash transactions. In Karwan Bazar, vegetable seller Mohammad Al Amin says even a single unusable note can erase his already slim profit margin. “If I receive a damaged note, it becomes a direct loss, because others refuse to accept it,” he explains.
Street vendors face similar challenges. Near Dhaka University, cigarette seller Masud Mia says a significant portion of the cash he receives consists of heavily worn ten and twenty taka notes. Many are rejected by wholesalers, leaving him with little choice but to absorb the loss.
The burden falls disproportionately on those least able to bear it. Traders say customers often insist on passing on damaged notes, but the same notes are refused when reused, creating a cycle of financial loss.
The problem extends beyond marketplaces. Commuters report frequent disputes on buses over the acceptability of notes, adding to daily frustrations.
In an effort to address the issue, Bangladesh Bank instructed commercial banks on 12 April to exchange torn and soiled notes. The central bank had issued a similar directive in December 2025, but awareness remains low, particularly among small traders.
Many say they are either unaware of the policy or reluctant to approach banks. Some pavement traders say they fear being turned away by security guards because of their appearance.
Even where the service is available, demand appears limited. At a branch of Trust Bank in Karwan Bazar, no customers were seen seeking note exchanges during an hour-long observation, although bank staff say a handful of people use the service on some days.
There are also concerns about the banks’ ability to meet demand. Officials acknowledge that supplies of fresh notes are constrained.
According to Bangladesh Bank Executive Director and spokesperson Arif Hossain Khan, the production of new currency has slowed due to shortages of specialised paper in the global market. He says it may take up to eighteen months to produce sufficient quantities of new notes.
Until then, many businesses are adapting in their own way. Some, like cigarette seller Shahidul Islam in Farmgate, have chosen to reject damaged notes altogether, even if it means losing sales.
For now, the country’s cash-dependent economy continues to grapple with a basic but disruptive problem: a shortage not of money, but of money that people are willing—or able—to use.
