Cash supply

Issuance of banknotes and coins is one of the core tasks legally imposed on the Bank of Finland. By virtue of the Treaty on the Functioning of the European Union, the ECB was granted the exclusive right to authorise the central banks to issue banknotes and the right to approve the amount of coins put into circulation in euro area countries annually.

The Bank of Finland may also issue cash handling rules and instructions for banks, other monetary financial institutions and similar entities.

The amount of euro banknotes and coins issued in Finland since the introduction of the euro has increased manifold compared with the national currency period. This is not due to an increase in cash payments in Finland, however; it reflects the growing use of euro cash as a payment instrument abroad and as a savings instrument both within and outside the euro area.

The parties involved in the cash supply chain in Finland, besides the Bank of Finland, are cash management companies, cash-in-transit companies, cash centres and deposit banks. The Bank of Finland has a wholesaler role, providing its customers with cash supply services, i.e. cash orders and cash returns.

These customers are Loomis Automatia Oy, Nokas Finland Oy, Reila Palvelut Oy and Bank of Åland Plc. The privately operated cash centres Loomis Suomi Oy, Nokas Finland Oy and Reila Palvelut Oy serve the needs of cash management companies and deposit banks as well as the banks' customers. Additionally, Loomis Suomi Oy and Nokas Finland Oy supply cash-in-transit services.

The cash-in-transit companies handle the distribution of cash to ATMs, retail outlets and deposit bank branches, where consumers either withdraw cash or receive it as change when making purchases. The cash-in-transit companies also return cash from, for example, shops, cash-in machines and deposit bank branches to the privately operated cash centres.

The cash centres check the authenticity and physical condition of the cash using their sorting machines, and banknotes which are in good condition are returned to circulation. The cash centres return surplus cash and unfit banknotes to the Bank of Finland.

The Bank of Finland also sorts banknotes with its own sorting machines. Unfit banknotes are shredded mechanically and the shredded notes are destroyed in an incineration plant.

In the single euro cash environment, it is natural for euro area countries to seek to harmonise their currency supply systems, where applicable. Coordination and cooperation take place in the area of banknote development, banknote procurement and management of strategic storage of euro banknotes.