SINGAPORE - The Monetary Authority of Singapore (MAS) is proposing to change the legal tender limit for coins and will seek public feedback before making its decision, it announced in a consultation paper on Thursday (March 16).
Here's what you should know about the proposal:
Q: What is a legal tender limit?
A: A legal tender limit refers to the maximum amount of a coin denomination that can be used for payment in a single transaction.
A seller or payee is obliged to accept payment up to these limits but may reject payments exceeding these limits.
Q: What are the existing legal tender limits?
A: Under the Currency Act, the existing limits are $2 per denomination for five-cent, 10-cent and 20-cent coins, and $10 for 50-cent coins. There is no current limit for payment using one-dollar coins.
Q: Why is there a need for legal tender limits?
A: To minimise the payee's inconvenience and cost in handling large quantities of low denomination currency.
It is also to prevent acts of mischief. MAS decided to review the existing legal tender limits after two cases of people abusing these limits were reported in 2014.
In one such case in October 2014, a mobile shop in Sim Lim Square tried to refund a customer $1,010 entirely in coins. In another case a month later, a man left $19,000 worth of coins at a car dealer's showroom.
Q: What is the new limit proposed by MAS?
A: MAS is proposing a uniform legal tender limit of 10 coins per denomination, across all denominations, in a single transaction.
This means that a buyer or payer can use up to 10 pieces each of five-cent, 10-cent, 20-cent, 50-cent and one-dollar coins per transaction.
Q: Why set the limit at 10 coins?
A: To keep the limits simple, intuitive and easy to remember. MAS said that the limit of 10 coins per denomination strikes a good balance between the interests of payers, who want to be able to pay with as many coins as possible and payees, who want a limit on the number of coins acceptable for payment to minimise inconvenience.
Q: MAS is seeking public input about the proposed change. How do I give feedback to MAS?
A: The feedback form is available on the MAS website.
Q: When is the period for giving feedback?
A: The public consultation period will last from March 16 to April 6 2017.