A dispute is looming between the Bank of Jamaica (BOJ) and commercial banks over plans to redesign the country’s polymer banknotes, just two years after their introduction, with the BOJ seeking to remove the Jamaica 60th Independence anniversary insignia, a move banks claim will come with significant costs.

The Bank of Jamaica, however, remains sceptical about the banks’ concerns, sources said.

The introduction of the polymer banknotes in June 2023 was a significant upgrade to Jamaica’s currency, with advanced security features and improved durability which the central bank said will help it save on the costs of acquiring the notes compared to the cotton notes they replace. The new notes were designed with the inclusion of the 60th anniversary insignia, to commemorate Jamaica’s 60th year of Independence from Britain. That 60th anniversary was celebrated in 2022, though the commemorative notes were released almost a year later.

“Now they want to take [the 60th anniversary insignia] off, but that is going back to reissuing the polymer notes…and the machines were calibrated for the design of the notes, and will have to be recalibrated if the notes are redesigned to take off the 60th anniversary,” one source told Jamaica Observer.

Bank of Nova Scotia Jamaica (BNSJ), responding to BusinessWeek queries on the matter in December, said adapting their automated banking machines (ABMs) to read the redesigned notes “would require a similar process to the adjustments done to adapt when the notes were initially redesigned.”

It added that the “testing process will also be similar and deployment of new file to recognise notes when deposited will be the same,” without elaborating further. BNSJ also pointed out that machine downtime to facilitate the recalibration “would be similar to the original project to migrate to polymer.” It didn’t quantify how long that process could take in its responses.

However, National Commercial Bank Jamaica (NCBJ) said the process to recalibrate machines to read the proposed new design of the notes without the 60th anniversary insignia could take almost a whole year.

“The redesign of the notes, specifically the removal of the anniversary insignia, will likely necessitate a reconfiguration of the deposit module of ABMs in the network, to accurately recognise and process a new banknote design,” NCBJ told BusinessWeek.

The bank said it would require collaboration with the Bank of Jamaica similar to the efforts undertaken when the current polymer notes were introduced in June 2023.

“Overall, the forecast effort could take up to 10 months to include development, testing, implementation, and distribution of the new notes,” the bank added. It is not clear when that 10 months timeline will start, but NCB, who gave the responses ahead of the Christmas shopping season, said it would not start it then, to minimise any disruptions that could be caused.

Pressed on the estimated costs of the recalibration, NCB said “it will vary based on several factors,” but added that the “adjustment can cost up to $100 million for the NCB machines in the network.”

Of the 855 ABMs that were in operation in October, about a third, or 262 of the 855 active machines were operated by NCB. BNS, on the other hand, had 259 active ABMs in the month, or about 30 per cent of total. Together, NCB and BNS operate nearly two-thirds of all ABMs in Jamaica. Bank of Jamaica records show 900 ABMs were installed in October.

But the central bank is yet to be convinced about some of the arguments proffered so far.

“The issue with the removal of the 60th anniversary insignia, we are getting exemplars to help them to adapt. We asked for some costing in September, because they said it will cost. We have spoken to the machine vendors and they have told us it is an expensive operation, but we are not convinced, because we have done it before and we have removed it and it wasn’t an issue. They just have to make the machines indifferent to the 60th anniversary logo,” the BOJ said in early December in response to the banks.

The new notes without the 60th anniversary insignia are expected to be rolled out from mid-year.

The BOJ, in 2012, produced notes with insignia commemorating Jamaica’s 50th year of Independence from Britain and revert to notes designed without the insignia without much problems, the central bank highlighted further.

Still, the banks are ready to get onboard and move forward with the project.

“The recalibration effort would be a major undertaking; if a change is required, we would seek to implement the new notes using a phased execution approach, scheduling upgrades during off-peak hours and prioritising high-trafficked locations to reduce customer service disruptions,” NCB said.