DESPITE the fact that our government itself has reneged on our national currency, it appears that the average citizen cannot have enough of it. The face value of notes and coins (currency) issued by the Central Bank has risen from R 130m at the end of 1992 to R382m at the end of November 2002, to over R450 million at December 31, 2007
This preference for using cash rather than cheques or debit cards should be of serious concern to the government.
As far back as 2003 banks became exasperated by customers withdrawing and depositing large amounts of money thus causing long queues at the till, especially towards the end of the month. In January of that year, the Seychelles Bankers Association (SBA) took pain and expense to advertise that they planned to charge their business customers a commission (the banks call it a levy) of 0.2% for depositing cash into their bank accounts. The main reason given by the SBA chairman on television in justification of their decision was the problems banks were having handling all this cash at the till. But the public reaction forced the banks to back down.
It was not a coincidence that the problems faced by the commercial banks at the time was driven by the decision of most of us to prefer holding our money in cash rather than bank deposits and to undertake transactions in cash rather than cheques or debit cards. To make matters worse, in July 2005 the Central Bank, out of the blue released a new R500 note. The excuse given by Francis Chang Leng, the Governor, was that the R100 rupee note was not adequate anymore to facilitate transactions.
At the time, this newspaper criticised the decision warning that it would be a boon for drug traffickers. We also noted that it would become a convenient vehicle to bribe voters and it did. Within a year over 300,000 of the five hundred rupee notes were in circulation with a face value of R150, 000, 000. We warned, also, that use of such a high denomination note would create new demands for R100 rupee notes with one R500 note generating a potential demand for four R100 note. We said that we should have issued a R200 note instead. The demand for R100 notes is now causing concern at the Central Bank, which has to print them overseas and pay in foreign currency.