The Central Bank of Kenya (CBK) is constitutionally and legally mandated to issue and manage the country’s currency, as outlined under Article 231(2) of the Constitution and Section 4A(1)(f) of the CBK Act. This mandate includes ensuring there is an adequate supply of quality notes and coins in circulation, withdrawing and destroying unfit currency, and designating official distribution points across the country. One important part of this role is helping the public replace damaged currency, whether it is torn, burnt, soiled, or chemically altered.

In Kenya, damaged currency is referred to as mutilated currency. The CBK defines mutilated currency as any note or coin that has been significantly defaced, worn out, or physically altered in a way that affects its appearance or usability, provided the damage was not intentional. If it is established that the damage was deliberate, the law provides for penalties of up to KSh 2,000, three months in prison, or both. This is meant to protect the integrity of the national currency and discourage misuse.

For a note or coin to qualify for replacement, several conditions must be met. The note must be genuine, more than half of it must be intact, it should be continuous (not pieced together from scraps), and it must have at least one complete serial number visible. These requirements are designed to ensure CBK can verify its authenticity and value. Any note that does not meet these conditions may be rejected.

If you have burnt or otherwise damaged currency, the first step is to carefully preserve it. Avoid peeling off fragments or further damaging the note. Check if the serial number is still visible, as this is crucial for identification. If the note is partly burnt, ensure you handle it gently to avoid breaking the remaining paper. The CBK advises that members of the public should act quickly because prolonged exposure to further damage may make replacement impossible.

You can take the damaged currency to the nearest CBK branch or a commercial bank. CBK has branches in Nairobi, Mombasa, Kisumu, and Eldoret. When you present the note, the bank will make an initial assessment. If the note meets the replacement criteria, it will be exchanged immediately at face value. In other cases, the bank may defer the exchange and forward the note to CBK for further examination.

The CBK (Currency Handling) Regulations, 2011, updated in 2022, guide this process. These regulations give CBK the authority to accept, defer, or reject a note based on its condition. If the currency is referred to CBK, the bank must issue a decision within 60 days from the date of submission. This period allows CBK experts to conduct thorough verification, especially in cases involving extreme damage such as burning or chemical contamination.

In special cases where notes are stained with security dye—often used during transit to deter theft—the replacement is only possible if the currency comes from licensed operators and is accompanied by proper documentation, such as the CBK’s Form CH 2. Individuals who find dye-stained currency must surrender it to the police, CBK, or a licensed financial institution immediately and provide a statement explaining how they obtained it.

CBK’s verification process involves checking the genuineness of the note and confirming that it has not been tampered with. Counterfeit notes are not replaced and may lead to serious penalties, including fines of up to twice the value of the note or KSh 200,000. This strict approach ensures counterfeit money does not enter circulation disguised as damaged legal tender.

The physical state of the note is also important. CBK uses detailed sorting standards, as outlined in Banking Circular No. 4 of 2008, to classify and evaluate notes. For example, notes that are soiled beyond 50%, torn with missing parts, have holes, or are stapled or taped are considered unfit. However, they can still be replaced if they meet the minimum acceptance criteria.

Coin replacement follows similar rules. If a coin is bent, corroded, or its outer ring separates from the inner part, it can be replaced provided it is genuine and the damage was not deliberate. CBK applies the same authenticity checks and may reject coins if they are too worn down or altered in a way that makes identification difficult.

There are situations where CBK may refuse replacement outright. This includes currency that is less than half its original size, lacks any serial number, or appears to have been deliberately mutilated. In such cases, the currency is deemed valueless, and the holder is advised on proper disposal.

For the public, the process of replacing damaged currency can be summarised into a few practical steps. First, assess the note’s condition, focusing on authenticity, intactness, continuity, and presence of a serial number. Second, take it to the nearest CBK branch or commercial bank for assessment. Third, provide any details about how the damage occurred, especially in cases of burning or dye staining.

If the bank cannot make an immediate decision, it will send the note to CBK for verification. This may take up to 60 days, after which you will be informed of the outcome. If the claim is approved, you will be issued new currency of equal value. If it is rejected, you will receive an explanation, and in some cases, you may appeal or request further review.

The CBK strongly encourages the public to handle money with care and store it in a safe environment, especially in homes or businesses prone to fire hazards. Accidental damage can be minimised through proper storage, but when it does happen, the law ensures that genuine losses can be recovered through the official replacement process.

Ultimately, replacing burnt or mutilated currency in Kenya is a structured and legally protected process. It ensures that the public retains the value of their money while safeguarding the integrity of the national currency. Knowing the law, acting quickly, and following the right procedure can mean the difference between recovering your money and losing it entirely.

By understanding and following these steps, Kenyans can confidently navigate situations where their currency is damaged, secure in the knowledge that CBK is committed to protecting their financial interests and the integrity of our legal tender.