Sunday Times - Sri Lanka 2005 June 5th - Plus - Page 4

Defacing Lankan Currency is a Crime

By Kavan Ratnatunga

I was recently surprised to see exhibited at the Dalada Maligawa Museum in Kandy and also at the Kiri Vehera Museum in Kataragama chains made of current Sri Lankan coins. I wonder if those who had them made as gifts or the curators of these Museums are aware that they are in direct violation of the monetary Act of Sri Lanka and guilty of an prosecutable offense, with a recently proposed fine of upto a lakh of rupees.

The recently issued 2004 Annual Report of the Central Bank of Sri Lanka states "The Currency Department conducted an oratory contest in Sinhala medium amongst school children in the age group of 15 - 19 years in order to create an awareness on the proper use of currency without defacement or mutilation,"

Shouldn't these Museums set a better example to the visiting school children and public and not act outside the existing Monetary Law of the Country.

Statutory Law

MONETARY LAW [Act 58 of 1949 certified on 28th August 1950]

§58. Any person who without the authority of the Monetary Board
cuts, perforates, or in any other way whatsoever mutilates any currency note;
prints, stamps, or draws anything upon any currency note, or affixes any seal or stamp to or upon any currency note;
attaches or affixes to or upon any currency note anything in the nature or form of an advertisement; or
reproduces in any form whatsoever, or makes a facsimile of, any currency note, shall be guilty of an offence.

Any person who, without the authority of the Monetary Board, melts, breaks up, perforates, mutilates or uses otherwise than as legal tender, any coin which is legal tender in Sri Lanka shall be guilty of an offence.

Any person who knowingly uses, possesses or deals with any metal or article which he knows or has reasonable cause to believe, is derived from any coin which has been dealt with in contravention of subsection (1), shall be guilty of an offence.

Mutilating Currency

As long ago as 1825 when the British Colonial power tried to introduce British Currency in Ceylon, it was not very successful since the British Silver coins were worth more than face value to the Silver craftsmen who kept melting them. The practice did not stop even after it was made illegal to mutilate coins, an almost impossible felony to enforce. The British stopped sending silver coins to Ceylon, creating a shortage in change, which was met the Indian silver rupee becoming the defacto unit of currency and by many coffee factories issuing their own copper tokens, from 1840 to 1870.

This law introduce many years ago is still part of the monetary act and is more justified today than a few decades ago.

In the 1, 2, 5 and 10 cent Lankan coins which have practically gone out of circulation, just the aluminum are worth more than the face value of the coin. Since 1996 the 25 cent 50 cent and one rupee Lankan coins are made with Nickel covered Steel to reduce cost of minting them.

It now costs the Central Bank of Sri Lanka more than the Face value to mint the coins the size and composition some of which was defined over 22 years ago. i.e. the same period the value of the Rupee has gone down by a factor of Ten. On average you need one thousand rupees in 2005 to make the same purchases as you could with one hundred rupees in 1983. The Brass Five rupee coin which had 30 cents(1984) of Brass when introduced now has about three rupees(2005) of brass in it.

So if coins are mutilated and taken out of circulation the Central Bank has to issue at a significant loss more coins into circulation. Currency notes although still cost less than face value to print need to be replaced every few years as they get dirty and any mutilation just shortens this useful lifetime a note can remain in circulation.

There are many more example to show how far this rule is ignored in Lanka.

On many of the older circulated currency notes one regularly finds multiple post marks. This practice seems to have stopped around the 1960's probably because the Central Bank informed the postal authorities they were guilty of an offence which was traceable.

Looking at many of the currency notes one gets from circulation today one notices that it is a common practice of cashiers to write a total in a bundle directly on the currency note rather than on a wrapper of the bundle. I hope they understand they are guilty of an offence. Some idiots even write their name and address on the currency notes, inviting to be picked up.

I have found a few notes with political slogans. A ten rupee currency note from the early 1980 I have collected states in Sinhala the "North for Amir", "South for Reagan" and "For us Kanatha" and reflects the political frustration of that era.

Indian Silver rupees and old Ceylon Silver coins a often used to decorate Jewelry boxes and make silver belts and Chains. As long as these artifacts were made after 1942 when these coins ceased to be legal tender, it is not an offence.

Comparison with USA

These laws are more relaxed in USA. U.S. Title 18, Chapter 17, Section 331: Prohibits among other things, fraudulent alteration and mutilation of coins. This statue does not, however, prohibit the mutilation of coins if done without fraudulent intent if the mutilated coins are not used fraudulently.

Nineteenth century companies in USA used to counter-stamp coins as a way of cheap advertisments, equivalent to today's SPAM E-mail.

Americans rarely reuse a penny they get in change. It hardly has any monetary value and there are proposals to discontinue there use. It is maintained by the politics of Jobs at the US Mint which needs to make a few billion one cent coins every year to replace the wastage.

Smashing one cent coins have been a big thing in America for a long time. An elongated coin is made by a coin being forced between two steel rollers. An engraving is on one or both of the rollers and as the coin passes through the rollers it is squeezed or elongated under tremendous pressure from the original round shape to one of an oval and the engraved design impressed into the coin at the same time. Such machines are frequently found near tourist attraction in USA to provide a cheap souvenirs. Many coin dealers impress a Business card on such an elongate hoping that the collector will keep it. They have become popular in Great Britain since the 1981 changes in the old law from which the Lankan law was originally derived.

The 50 US State Quarter coins series being issued from 1999 to 2008 has created a collector market being exploited by US entrepreneurs. From simply gold plating these coins or from a more elaborate automated colorizing of them with enamel paint dealers produce items that can be sold to collectors at coin shows and on eBay for more than ten times the face value of the coin. Another gimmick is to re-strike a real US quarter with a different design. A popular parody "Head Quarter" on Bill Clinton few years ago as led to a series of them been re-struck with different designs. The coin shown issued as if for "Texas" shows George Bush trying to lasso Osama Bin Laden.

A US website called encorages readers to write the URL on the note register the serial number of any one dollar bill from circulation with location and track this tagged note after you spend it if others who get it in the future bother to record where they got it on that website.

Author maintains an educational website on two thousand years of Lankan coins at, and is a life member of the Sri Lanka Numismatic Society.

This text is a copy of Defacing currency is a crime By Kavan Ratnatunga which appeared in the SundayTimes of Sri Lanka on 2005 June 5th. The eEdition online doesn't have the illustrations of the printed copy.