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Currency Chest Facility for UCBs: Eligibility Norms

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Source: Reserve Bank of India · RBI/2005-06/337 · issued 24 Mar 2006 · ~1 min read
Quick answerRBI now allows scheduled UCBs meeting strict norms—net worth Rs 200 crore, CRAR 12%, net NPA under 10%, three years profit, 'A' audit, CRR/SLR compliance, and an elected board with two professionals—to apply for currency chest facility.
The rule, in the simplest words
How it plays out — a real example

A treasury officer in Indore checks her bank's latest numbers: net worth is Rs 250 crore, CRAR is 13%, and net NPA is 5%. She sees three years of profit and an 'A' audit. She tells her manager, 'We qualify for the currency chest facility—let's apply to RBI so we can handle our own cash instead of relying on other banks.'

What changed

RBI extended currency chest facility to scheduled UCBs registered under the Multi State Co-operative Societies Act, 2002 or state acts with an MOU with RBI. Previously, this facility was not available to UCBs. The eligibility norms were notified separately as per the Mid Term Review of the Annual Policy Statement for 2005-06.

What it means for you

This move allows stronger UCBs to manage cash logistics directly, reducing dependence on other banks. It signals RBI's confidence in financially sound UCBs, but the high net worth and profitability thresholds limit eligibility to top-tier banks. Lenders must strengthen balance sheets to qualify.

What you must do

Who it affects

Scheduled primary (urban) co-operative banks, UCBs registered under Multi State Co-operative Societies Act, 2002, UCBs under state acts with MOU with RBI, Bank boards and management teams

❓ Common questions

What is the minimum net worth required for a UCB to get currency chest facility?

The bank must have a minimum net worth of Rs 200 crore.

Does the bank need to have an elected board with professionals?

Yes, the bank must have an elected board of management with at least two professionals.

Where should eligible UCBs apply for this facility?

Applications should be sent to the Chief General Manager, RBI, Department of Currency Management, Central Office, Mumbai.

📜 Read the original circular — full text as issued by RBI
RBI/2005-06/337 UBD(PCB).Cir.No.39/ 09.17.500/2005-06 March 24, 2006. The Chief Executive Officers of all Primary (urban) Co-operative Banks Dear Sir, Currency Chest facility for UCBs As you are aware, an announcement was made in the Mid Term Review of the Annual Policy Statement for the year 2005-06 to extend currency chest facility to scheduled UCBs registered under the Multi State Co-operative Societies Act, 2002 and under the State Acts, where the State governments concerned have assured regulatory coordination by entering into MOU with the Reserve Bank. The eligibility norms were to be notified separately. 2. It has since been decided to extend the currency chest facility to scheduled primary (urban) cooperative banks (UCBs) which are registered under Multi State Co-operative Societies Act, 2002 and under the State Acts, where the State Governments concerned have assured regulatory co-ordination by entering into MOU with the Bank subject to compliance with the following eligibility norms: a. The bank should have minimum net worth of Rs 200 crore. b. It should have a CRAR of 12 % and net NPA less than 10 %. c. The bank should have made profit in the preceding three years and should not have accumulated losses. d. The bank should have a minimum 'A' audit classification. e. The bank should be complying with CRR and SLR requirements. f. The bank should have an elected board of management, which has at least two professionals. 3. Accordingly, UCBs satisfying the above norms may apply to the Chief General Manager, Reserve Bank of India, Department of Currency Management, Central Office, Central Office Building, Shahid Bhagat Singh Road, Mumbai – 400 001 for necessary authorisation. Yours faithfully (N.S.Vishwanathan) Chief General Manager In-charge
Reproduced for reference with acknowledgment — Source: Reserve Bank of India · RBI/2005-06/337 · issued 24 Mar 2006. The plain-English explanation above is BankPulse’s own independent summary.
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Who does what — compliance checklist
💰 Credit
  • Assess your bank's net worth, CRAR, and NPA ratios against the Rs 200 crore, 12%, and 10% thresholds.
📜 Compliance
  • Ensure three consecutive years of profit and no accumulated losses.
  • Maintain 'A' audit classification and full CRR/SLR compliance.
  • Verify your board has at least two professionals and is elected.
  • If eligible, apply to RBI's Department of Currency Management with required documentation.
Grouped from the action items above — a single circular may involve more than one team.
Worked example & action-note template

Example: if you are a Credit Manager at a bank this circular applies to (Scheduled primary (urban) co-operative banks, UCBs registered under Multi State Co-operative Societies Act, 2002, UCBs under state acts with MOU with RBI, Bank boards and management teams), your first concrete step on “Currency Chest Facility for UCBs: Eligibility Norms” is: “Assess your bank's net worth, CRAR, and NPA ratios against the Rs 200 crore, 12%, and 10% thresholds.” (RBI issued this 24 Mar 2006).

  1. Circular: RBI/2005-06/337 -- Currency Chest Facility for UCBs: Eligibility Norms
  2. Issued: 24 Mar 2006
  3. Action required: Assess your bank's net worth, CRAR, and NPA ratios against the Rs 200 crore, 12%, and 10% thresholds.
  4. Action required: Ensure three consecutive years of profit and no accumulated losses.
  5. Action required: Maintain 'A' audit classification and full CRR/SLR compliance.
  6. Action required: Verify your board has at least two professionals and is elected.
  7. Action required: If eligible, apply to RBI's Department of Currency Management with required documentation.
  8. Owner: ____________ Target date: ____________
  9. Board/committee approval needed? Y / N
  10. Evidence filed in compliance register on: ____________
Built only from this circular’s own published fields — not legal advice; always confirm against the official RBI source.

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Official RBI source: https://www.rbi.org.in/Scripts/NotificationUser.aspx?Id=2794&Mode=0 — Plain-English summary by BankPulse (bankpulse.ai), reviewed by our expert reviewer, CA Amit Jain. Independent platform, not affiliated with the Reserve Bank of India; is our own plain-English paraphrase, not RBI’s original wording.
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