Currency Chest Shortages: RBI Tightens Internal Control Norms
No longer current — replaced by RBI Master Direction RBI/2009-10/89
Source: Reserve Bank of India · RBI/2005-06/91 · issued 02 Aug 2005 · ~1 min read
Quick answerRBI flags rising shortages in currency chest remittances and directs banks to enforce mandatory two-monthly balance verification and strengthen internal controls like surprise checks and joint custody.
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.
Historical instruction — do not use for current compliance. This is what was required at the time; it no longer reflects current RBI requirements. If no replacement rule is linked above, that only means none is recorded on our register yet — it does not prove no later applicable rule exists. Confirm on the official RBI source below.
What banks were required to do at the time
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
❓ Common questions
Regulatory timeline
Decoded by BankPulse2026-06-19 20:16 IST
Superseded by — RBI Master Direction RBI/2009-10/89
Status change: superseded08 Jul 2026, 13:18 IST
Built from our lineage records — each fact carries its provenance; missing history simply is not shown (never guessed).
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.
📜 This document’s life story (1 recorded event, each backed by RBI’s own words)
Superseded byRBI Master Direction RBI/2009-10/89
📜 Read the original circular — full text as issued by RBI
RBI/2005-06/91 DCM(CC)No G-8 /03.28.01/2005-06.
August 02, 2005
The Chairman & Managing Director/ Chief Executive Officer (All banks having currency chests)
Dear Sir,
Shortages in currency chests - Strengthening of internal control systems in banks maintaining currency chests.
Please refer to our circular DCM(CC)No.485/03.30.02/2003-04 dated October 23, 2003. We observe from the records that the shortages in the remittances sent by currency chests of various banks to Reserve Bank of India have been showing an increasing trend. One of the reasons for such shortages and even for frauds/misappropriation is the inability of the Controlling Offices of the banks to ensure periodical verification in time of the chest balances and/or at least once in two months as prescribed in our circular referred to above. Further, internal quantitative/qualitative checks exercised in the currency chests are insufficient, and which contribute to increasing incidents of shortages and misappropriation, besides increasing risk. We shall, therefore, be glad if you will please issue necessary instructions to the Controlling Offices of your chest branches for ensuring verification of balances as per the minimum periodicity stipulated in our circular and essential safeguards in internal control system (such as surprise verification/effective joint custody, etc.) are invariably adhered to.
2. Please acknowledge receipt.
Yours faithfully,
(P R Nair) General Manager
Reproduced for reference with acknowledgment — Source: Reserve Bank of India · RBI/2005-06/91 · issued 02 Aug 2005. The plain-English explanation above is BankPulse’s own independent summary.
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BankPulse Compliance Evidence Pack — generated 05 Aug 2026 · status cross-checked against RBI’s official withdrawal register (refreshed weekly). Official RBI source: https://www.rbi.org.in/Scripts/NotificationUser.aspx?Id=2405&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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