The governor of the Bank of Canada made a rare "qualified" apology to Canadians Monday for offending them with the bank's decision not to use the image of an Asian woman on the new $100 bill.

In a statement from Ottawa, Mark Carney admits the bank made an error in judgment.

"The bank's handling of this issue did not meet the standards Canadians justifiably expect of us," Carney said.

The apology came after the central bank last week found itself at the centre of controversy when it was revealed it had scrapped its initial design celebrating the discovery of insulin that featured an Asian woman looking through a microscope after focus groups who were shown the picture complained.

While some, especially in Toronto, liked having an Asian person on the banknote, saying it represents multiculturalism, others said the image conveyed an inappropriate stereotype, specifically that "Asians have an affinity for the sciences."

Others considered the brown colour of the bill to reinforce the perception that the person was Asian and said it racialized the note.

"The person on it appears to be of Asian decent which doesn't rep. Canada," said one comment in the report by The Strategic Counsel prepared after eight focus groups were surveyed in Toronto, Fredericton, N.B., Montreal and Calgary in October 2009.

Others said more ethnicities should also be shown, the report said.

In Quebec, including an Asian woman on the banknote without representing any other ethnic groups was seen as contentious, the report said.

The focus groups were used to test what types of images best evoked the theme for the bill and one image shown to them was Photoshopped from a picture of a South Asian woman, Carney said.

The image on the actual banknote was not drawn to resemble an actual person, which is why it didn't look the same as the Photoshopped image shown to the focus groups, Carney said.

But the final design of the bill which went into circulation last November appears to show a Caucasian woman of European descent. The decision to switch images outraged many Canadians, including Chinese groups, who accused the central bank of racism.

"In the development of our $100 banknote, efforts by the banknote designers to avoid depicting a specific individual resulted in an image that appears to represent only one ethnic group," Carney said.

"That was not the bank's intention and I apologize to those who were offended."

The bank will review its design process, he added.

"Our bank notes belong to all Canadians."

Carney gave a "qualified apology" aimed at those who were offended, noted Victor Wong, executive director of the Chinese Canadian National Council, whose group on Friday had accused the bank of caving to criticism and trying to "erase" the Chinese story in Canada from the country's currency.

"It would have been cleaner if he'd said, 'I apologize'," Wong said Monday in an interview in Toronto.

But even so, he called the admission a "constructive, positive development" that moves the bank's position forward from Friday.

Wong spoke with Carney late Monday morning and offered to provide input into the bank's review process which Carney accepted, Wong said.

"This is a win-win," he said. "They've acknowledged their process has been a mistake."

But Wong questions why the bank uses composite drawings and not real people on the backs of its bills, noting the country has a long list of heroes from which to choose.