What changed
RBI observed an increasing trend of shortages in remittances from currency chests to RBI, linked to inadequate periodical verification by controlling offices. The circular reiterates the requirement for verification at least once every two months and calls for stricter internal quantitative and qualitative checks.
What it means for you
Banks with currency chests face heightened scrutiny on their internal control systems. Failure to comply with the prescribed verification periodicity and safeguards like surprise verification and joint custody increases operational risk and could lead to fraud or misappropriation. This directive reinforces RBI's expectation of proactive oversight by controlling offices.
What you must do
- Issue instructions to all controlling offices to ensure currency chest balances are verified at least once every two months as per earlier circular.
- Strengthen internal control systems with surprise verification and effective joint custody measures.
Who it affects
All banks maintaining currency chests, Controlling offices of chest branches
What is the minimum periodicity for currency chest balance verification?
As per RBI's earlier circular, verification must be done at least once every two months.
What are the key internal controls RBI expects?
RBI emphasizes surprise verification and effective joint custody arrangements to prevent shortages and misappropriation.