In accordance with Article 12.1 of the Statute of the European System of Central Banks (ESCB), the NCBs shall carry out operations which form part of the tasks of the Eurosystem.
The Bank of Greece, being a member of the ESCB, is responsible for:
- carrying out monetary policy operations
- handling euro banknotes,
- issuing banknotes
on Greek territory.
Cash handling services
In accordance with article 105 (2) of the Treaty on European Union, the ESCB shall promote the smooth operation of payment systems.
The introduction of euro banknotes and coins created a new reality, as euro area NCBs had to deal with different practices concerning cash handling. These were due to national particularities, e.g. the structure of the systems used by NCBs and individual commercial banks, the legal framework, customers’ habits, geographical features etc.
For the smooth operation of the euro cash cycle, the delivery of appropriate cash handling services by the Eurosystem and the creation of the Single Euro Payments Area (SEPA), the Governing Council of the ECB adopted the following measures:
common pricing policy for cash transactions carried out by NCBs’ corporate clients;
identification of services rendered by NCBs free of charge, as well as of remunerated services under NCBs’ decisions;
common policy as regards the recycling of banknotes by credit institutions and other cash handlers;
common approach as regards the business hours and the rules governing credit/debit of cash transactions offered by NCBs through their outlets.
In February 2007, the Governing Council of the ECB specified a roadmap to achieve greater convergence of cash handling services offered by NCBs. Such convergence will make it easier to reap the benefits of the single currency and will ensure fair competitive treatment. Though it is necessary to harmonise the services offered, the Eurosystem does not envisage a “one-size-fits-all” cash supply system for the euro area in view of the different national economic and geographical environments.
As from July 2007, in the context of the adopted roadmap, the NCBs offer (on request) cash handling services to euro area credit institutions operating outside their territory.
Other issues are also examined in order to achieve greater convergence, including:
the electronic exchange of information with credit institutions regarding cash deposits and withdrawals,
common packaging rules for the cash handling services offered by NCBs free of charge.
The Bank of Greece plays a pivotal role in the cash cycle. Services offered by the Bank of Greece and its business units follow the latest developments and the new conditions prevailing in the credit system, while they also contribute to its further growth.
The operation of the extended network of the Bank of Greece contributes to the effective fulfilment of its mission and lays the foundations for the further modernisation and ongoing upgrading of cash handling services.
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Production/Issuance of euro banknotes
One of the competences of the Bank of Greece is to secure the unhindered and effective supply of the banking sector with euro banknotes and coins.
Demand for euro banknotes is met by the Bank of Greece through annual orders for banknote production, the management of reserves and the effective use of euro banknotes.
The production of banknotes at a Eurosystem level is effected on the basis of a decentralised production system. The responsibility to produce the different denominations of euro banknotes is conferred by the ECB to NCBs, taking into consideration the preferences of individual NCBs. Each euro area NCB undertakes to produce its corresponding share of the total quantity of euro banknotes only for a small number of denominations.
The decentralised production system allows the Eurosystem to benefit from economies of scale while ensuring the uniform quality of produced banknotes, as each denomination is produced in few printing works.
In September 2004, the Governing Council of the ECB (Guideline ECB/2004/18 on the procurement of euro banknotes) decided to establish a tender procedure for the production of euro banknotes, which will come into force by 1 January 2012 at the latest.
This single Eurosystem tender procedure will ensure a level playing field between all printing works participating in the procedure, as well as transparency and security in euro banknote production.
NCBs with in-house printing works will have the right to be exempt, if they wish so, from the single Eurosystem tender procedure, and will be able to continue to produce euro banknotes assigned to their in-house printing works.
The responsibility for the production of coins lies with Member States. The Bank of Greece Printing Works is producing euro coins on behalf of the Greek State.
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Sorting/Counting of euro banknotes and coins
The Bank of Greece takes all necessary measures to ensure a high quality of banknotes in circulation and to duly analyse counterfeits.
All euro banknotes and coins that are returned to the Bank of Greece are subject to authentication and fitness checks with the use of fully automated machines.
Worn or defective euro banknotes are withdrawn from circulation and replaced by new or fit banknotes.
In order to ensure the smooth operation of the cash life cycle and the good quality of banknotes in circulation, the Bank of Greece monitors the condition of euro banknotes in circulation within its territory.
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