The Reserve Bank manages the issuance and distribution of banknotes to commercial banks. Commercial banks purchase banknotes directly from the Reserve Bank. Those banknotes are transported and stored by the banks at approved cash centres located throughout Australia. The Reserve Bank also maintains a contingency holding of banknotes to meet seasonal, and other, fluctuations in demand.
To prepare for the new banknote series, the Reserve Bank established a program to upgrade its existing banknote infrastructure. The purpose of the program is to increase banknote storage and processing capacity, and to introduce new technologies and systems to improve banknote logistics processes. The program includes the construction of the National Banknote Site at the Reserve Bank's existing Craigieburn site. Construction of the new two-storey building began in June 2015, and is scheduled to be operational in 2017.
The Reserve Bank has established quality standards for banknotes in circulation. Banknotes which are identified by banks, other authorised deposit-taking institutions and cash centre operators when they are no longer fit for circulation are returned to the National Note Processing and Distribution Centre (NNPDC).
From time to time, the Reserve Bank also arranges for the return of circulating banknotes to the NNPDC. These banknotes are processed through high-speed automated machines to check for quality and authenticity. Banknotes that are not fit for further circulation are shredded for polymer recycling; authentic fit banknotes are reissued to commercial banks.
At the end of June 2016, there were 1.4 billion banknotes worth $70.2 billion on issue in Australia. The $50 and $100 banknotes continue to account for the majority of banknotes on issue, with a combined share of 93 per cent of the value and 68 per cent of the number of banknotes in circulation.
|Banknotes on issue||$m||%||(millions)||%|
|Year||Number (millions)||Year||Number (millions)|
*Due to rounding totals may not add up.