What changed
RBI observed that some banks introduced products barring counter cash deposits, requiring customers to use ATMs instead. The circular explicitly prohibits such clauses in terms and conditions, mandating that branches must accept cash over the counter from any customer who wishes to deposit cash.
What it means for you
Banks must immediately review and revise any product terms that limit cash deposits to ATMs only, as these are deemed unfair and inconsistent with banking fundamentals. This reinforces the basic definition of banking as accepting deposits from the public, and non-compliance could invite regulatory action.
What you must do
- Audit all existing product terms and conditions to remove any clause restricting cash deposits over the counter.
- Ensure all branch staff are trained to accept cash deposits from any customer who requests counter service.
- Communicate this directive to product development teams to avoid future non-compliant product designs.
- Update internal policies and customer-facing documents to reflect mandatory cash acceptance at counters.
Who it affects
All scheduled commercial banks (excluding RRBs), Branch operations teams, Product development and legal departments, Retail and corporate customers
Does this circular apply to Regional Rural Banks (RRBs)?
No, the circular explicitly excludes RRBs from its scope, as it is addressed to all scheduled commercial banks excluding RRBs.
Can we still offer ATM-only deposit products if we provide an alternative counter option?
No, the circular prohibits any product or clause that restricts cash deposits over the counter. Banks must accept cash at counters from all customers who choose to deposit that way.
What is the penalty for non-compliance with this directive?
The circular does not specify penalties, but non-compliance may be treated as an unfair practice and could lead to regulatory action by RBI.