What changed
RBI raised the maximum service charge that currency chest banks can levy on non-chest bank branches for cash deposits from Re. 1 to Rs. 2 per packet of 100 notes, effective April 1, 2007. The exemption for co-operative banks and regional rural banks under the Remittance Facility Scheme continues unchanged.
What it means for you
This gives chest banks additional revenue to cover the cost of handling cash for smaller branches, potentially improving service quality. Non-chest branches will face higher costs for cash deposits, which may prompt them to optimize cash management or renegotiate arrangements.
What you must do
- Update service charge schedules to reflect the new Rs. 2 per packet rate from April 1, 2007.
- Advise constituent non-chest branches well in advance about the revised charges.
- Ensure co-operative banks and RRBs continue to receive the exemption under the Remittance Facility Scheme.
- Review cash handling agreements with non-chest branches to align with the new rate.
Who it affects
All banks holding currency chests, Non-chest bank branches depositing cash at chest branches, Co-operative banks and Regional Rural Banks (exempted)
What is the new service charge for cash deposits by non-chest branches?
From April 1, 2007, chest banks can charge Rs. 2 per packet of 100 notes, up from the earlier Re. 1 per packet.
Are co-operative banks and RRBs affected by this change?
No, they continue to be exempt from these charges for cash deposits under the RBI's Remittance Facility Scheme.