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. Last Updated: 07/27/2016

Banks Meet to Deal With New $100 Bill

Central Bank officials sought Monday to quell growing popular concerns about new $100 bills that will appear in Russia after the new year, saying they will meet with commercial banks to hammer out an agreement on commissions charged for exchanging old $100 notes.


"Everything depends on how commercial banks will approach this exchange," said Alexander Yurov, director of the department of emission operations.


American officials have stressed that the old notes -- being phased out because of growing counterfeiting -- will remain legal tender for years until they are taken out of circulation. But that has not stopped some exchange bureaus run by Russian commercial banks from intending to charge between 10 and 15 percent commissions for changing old dollars into new ones, Yevgeny Ivanov, deputy head of the bank's hard-currency control department, told Interfax.


According to other officials, interbank competition, rather than pressure from the Central Bank, should make that an unlikely scenario.


"One of the reasons why foreign-currency exchange commissions in Russia are so low as compared with other countries is that we have such a developed system of exchange points," said Alexander Khandruyev, first deputy chairman of the Central Bank. "Competition will minimize the size of the commission banks can charge" on the new $100 bills."


The bank intends to conduct a series of meetings with representatives of several "very solid" banks that control two-thirds of Russia's hard-currency operations to agree on a framework for exchanging old dollars, said Viktor Melnikov, head of the bank's hard-currency control department.


Melnikov could not name the commercial banks that would meet with Central Bank officials, nor say when the negotiations would take place.


Although Central Bank officials had said earlier that charging commissions for exchanging old dollars was illegal, participants at Monday's press conference said that they are now primarily concerned with ensuring that banks do not charge "excessive" rates -- defined as anything over 2 percent.


"The system of currency regulation is not oriented on catching someone and punishing them, but on creating a high-quality monitoring of hard-currency inflows," Melnikov said.


The new $100 bill, introduced by the U.S. Treasury, features a slightly larger and off-center image of Benjamin Franklin, a watermark and ink that changes color when held to the light, and a host of other changes that amount to a significant redesign of the note. New versions of other denominations will be phased in over the next couple of years.


While saying that the new Russian rubles issued in 1995 are better protected against counterfeit, Yurov said consumers can rest assured that the new dollars are protected "on a sufficiently good level."


With high-tech dollars on the way, though, counterfeiters will be eager to unload their old products on unsuspecting citizens, bank officials said.


And a hefty supply of counterfeit greenbacks is available. Russian counterfeiters have stocked up on enough fake dollars to last them 18 years, Ivanov of the hard-currency division said, Interfax reported.


The bank has already learned of four cases where new dollars were sold through high-placed connections with delivery promised after the new year, officials said.


"People should be more careful when they exchange money now, because it could easily happen that some bureaux will use drawings (of the new dollars) to prepare a supply ahead of time and open an exchange point," said Yurov. Out of the approximately $15-$20 billion in cash dollars circulating in Russia today, "several billion" are counterfeit, he said.