Scottish banknotes

Banknotes of Scotland are the tradable notes of the Pound Sterling that are in circulation in Scotland. The issuing of retail-bank banknotes in Scotland is subject to the Bank Charter Act 1844, Banknotes (Scotland) Act 1845, the Currency and Bank Notes Act 1928, and the Coinage Act 1971. Currently, three retail banks are allowed to print notes for circulation in Scotland; Bank of Scotland, Royal Bank of Scotland, and Clydesdale Bank.

Scottish banknotes are unusual, firstly because they are issued by retail banks, not central banks, and secondly, as they are technically not legal tender anywhere in the United Kingdom – not even in Scotland. As such, they are classified as promissory notes and legislation requires that the issuing banks hold a sum of Bank of England banknotes or gold equvialent to the total value of notes issued.

The fact that the notes are defined as legal currency means they are not withdrawn from circulation in the same way as the Bank of England notes with a final date. Instead the Scottish Banks withdraw old notes from circulation as they are banked. Any notes still in circulation continue to be honoured.

All Bank of Scotland notes bear a portrait of Sir Walter Scott on the front in commemoration of his 1826 Malachi Malagrowther campaign for Scottish banks to retain the right to issue their own notes. Bank of Scotland's 2007 redesign of their banknotes are known as the Bridges of Scotland series. These notes were introduced on 17 September 2007, and show Scotland's most famous bridges on the reverse side. The Bridges of Scotland series is currently being refreshed with the issue of new polymer notes with designs that follow the same basic theme of "bridges". The previous Tercentenary series notes are being withdrawn from circulation and replaced with the 2007 series (or polymer series as these are issued), but remain legal currency.

Following the announcement that HBOS (Bank of Scotland's parent company) would be taken over by Lloyds TSB in September 2008, it was confirmed that the new banking company would continue to print bank notes under the Bank of Scotland name. According to the Bank Notes (Scotland) Act 1845, the bank could have lost its note-issuing rights, but by retaining headquarters within Scotland, banknote issue will continue.

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