What changed
A Gujarat High Court case involving refusal of a demand draft with a fraction of a rupee led the court to direct RBI to take steps and issue fresh notifications to all banks regarding acceptance of small denomination notes/coins. RBI subsequently issued this circular to all RRBs, instructing them to ensure acceptance and warning of stern action for non-compliance by staff.
What it means for you
RRBs must ensure all branches and staff accept lower denomination notes and coins without exception. This reinforces customer rights and prevents service denials. Banks need to train staff and enforce compliance to avoid penalties.
What you must do
- Issue strict instructions to all branches to accept small denomination notes and coins without refusal.
- Train all staff on these instructions and ensure they are fully conversant with compliance requirements.
- Monitor branch adherence and take stern action against any staff member who refuses to accept such currency.
- Acknowledge receipt of this circular to your respective RBI Regional Office.
Who it affects
All Regional Rural Banks (RRBs), RRB branch staff and management, Customers tendering small denomination notes and coins
What triggered this RBI circular?
A case before the Gujarat High Court involving a bank's refusal to accept a demand draft with a fraction of a rupee led the court to direct RBI to take appropriate steps and issue fresh notifications to all banks regarding acceptance of small denomination notes and coins.
What action will RBI take if a branch refuses to accept small notes?
RBI has warned of stern action against any staff member who refuses to accept small denomination notes or coins, as per the circular.
Does this apply only to RRBs or all banks?
This specific circular is addressed to all Regional Rural Banks. The High Court directive was for RBI to issue notifications to all banks, but this circular only covers RRBs.