They have been wearing out at an alarming rate and now the green Tsh. 500 banknotes are about to be taken out of circulation for good.
The Central Bank of Tanzania now intends to float new 500/- coins, to replace the current lower ranking bill that, according to BOT Governor, Prof Benno Ndulu, wear off fast.
"Coins are more durable with longer life-span of seven years, unlike banknotes that need to be renewed every seven months," said Governor Ndulu, adding that the 500/- bills need to be replaced with coins because of their wider circulation, being handled by more people.
Addressing journalists in Arusha, the Central Bank Governor explained that the decision follows mass complaints from people regarding the pathetic state of the green 500/- bills currently circulating in the country and therefore BOT has decided to come up with a 'durable' solution.
"We investigated and discovered that, the 500/- notes are the most circulating bank notes because being of low value than others, most people use them as the main medium of exchange," stated Prof Ndulu.
According to the BOT governor, banknotes take an average of seven months in circulation before starting to wear-off after which they are then recalled back and destroyed at the BOT base in Dar-es-salaam.
"But as it happens, the 500/- bills have not been returning to BOT as frequently as we expect and it seems people have been holding onto them refusing to let them go that is why they seem to be getting older than other bills," said Prof Ndulu explaining that the only way that note could be renewed when people take them into banks.
"Tanzanians have been banking only higher-valued bills, which are the 2000/-, 5000/- and 10,000/- that have been making turnaround to BOT but lower valued banknotes (500/- and 1000/-) have been sticking in circulation thus susceptible to mass wear-and-tear.
So the only way out as far as BOT is concerned is to convert the notes into coins; "Besides, Tanzania has not produced new coins for years and latest such release was the 200/- coins range which is the highest valued penny in circulation today," said Mr Ndulu.