What changed
This 2007 Master Circular updates the 2002 version, consolidating all prior circulars on note and coin exchange. It reiterates the liberalised definition of cut notes and delegation of powers to currency chest branches for mutilated note exchange under the RBI (Note Refund) Rules, 1975.
What it means for you
Banks must ensure all branches freely exchange soiled and cut notes as per the liberalised criteria, treating them as soiled notes not for reissue. Mutilated notes require adjudication by a Prescribed Officer (branch manager or cash officer) under the Note Refund Rules. Extremely brittle or burnt notes should not be accepted by branches; holders may be advised to tender these notes to the concerned RBI Issue Offices for adjudication under a Special Procedure.
What you must do
- Train branch staff to identify and exchange single-numbered notes (₹1, ₹2, ₹5) in up to two pieces with complete number and essential features.
- Train staff to exchange double-numbered notes (₹10 to ₹1000) in up to two pieces with matching numbers and no missing essential features.
- Designate branch managers and cash officers as Prescribed Officers to adjudicate mutilated notes under the Note Refund Rules.
- Ensure soiled and cut notes are not reissued to public; deposit them in currency chests for RBI remittance.
- Advise customers with extremely brittle, burnt, or stuck notes to approach RBI Issue Offices for special adjudication.
Who it affects
All scheduled commercial banks with currency chests, Bank branch managers and cash officers, Bank customers seeking note exchange
What types of cut notes must banks freely exchange?
Single-numbered notes (₹1, ₹2, ₹5) in not more than two pieces with complete number and essential features, and double-numbered notes (₹10 to ₹1000) in not more than two pieces with matching numbers and no missing essential features.
Who can adjudicate mutilated notes at a bank branch?
The branch manager or officer-in-charge of accounts/cash wing, designated as Prescribed Officer, can adjudicate mutilated notes under the RBI (Note Refund) Rules, 1975.
What should I do with extremely brittle or burnt notes?
Bank branches cannot accept them. Advise the holder to tender these notes to the concerned RBI Issue Office for adjudication under a Special Procedure.