What changed
The tolerance level for reissuable notes in soiled banknote remittances to RBI has been reduced from 10% to 5% per remittance, effective immediately. This replaces the earlier 10% threshold set in February 2005.
What it means for you
Banks with currency chests must now ensure that at least 95% of notes in each soiled note remittance are genuinely non-reissuable. This tightens quality control and reduces the burden on RBI to re-sort mixed notes. Banks may need to recalibrate NSM settings and improve sorting accuracy to avoid rejection or penalties.
What you must do
- Immediately update currency chest branch instructions to reflect the new 5% tolerance limit.
- Verify that all Note Sorting Machines at currency chests are calibrated to sort notes accurately and consistently.
- Conduct a quick audit of recent remittances to ensure compliance with the tighter threshold.
- Train currency chest staff on the revised tolerance and proper sorting procedures.
Who it affects
All banks operating currency chests, Currency chest branch managers and staff, RBI's note processing and remittance teams
What is the new tolerance level for reissuable notes in soiled note remittances?
The tolerance has been reduced from 10% to 5% per remittance, effective immediately from February 12, 2007.
Do we need to install new Note Sorting Machines?
No, the circular does not mandate new installations. It requires that existing NSMs at currency chests be used to sort notes, and only non-reissuable notes be sent to RBI.
What happens if our remittance exceeds the 5% tolerance?
The circular does not specify penalties, but banks should expect RBI to reject or return non-compliant remittances. Strict adherence is advised.