What changed
RBI issued a master circular superseding all prior instructions on penal interest for currency chest reporting. It set a minimum transaction amount of Rs 1,00,000 in multiples of Rs 50,000. Reporting timelines were standardized: same-day for ICCOMS users (by 11 PM) and next working day for Link Offices. Penal interest is now levied after 3 clear working days delay, or on T+0 basis for ICCOMS, with a possible grace period at RBI's discretion during stabilization.
What it means for you
Banks with currency chests face stricter reporting discipline with clear timelines and penalties. Delays beyond 3 days attract penal interest on the due amount, and wrong reporting incurs interest until corrected. Counterfeit notes in remittances lead to immediate debit and penal interest, increasing operational risk for banks.
What you must do
- Ensure all currency chest transactions are reported to Link Offices on the same day, and Link Offices report to Issue Offices by next working day.
- For ICCOMS-enabled circles, upload transactions via SWS by 11 PM on the same business day to avoid T+0 penal interest; note that RBI may grant a grace period during stabilization.
- Verify that remittance transactions are not misreported as deposits to avoid wrong reporting penalties.
- Train staff on counterfeit note detection and reporting to prevent debits and penal interest on fake notes in chest balances.
- Monitor persistent delays or discrepancies and address with controlling offices after warnings from RBI regional offices.
Who it affects
All banks with currency chests, Link Offices of currency chests, Sub-Treasury Offices reporting to Issue Offices, Banks using ICCOMS for chest transaction reporting
What is the minimum transaction amount for currency chest deposits/withdrawals?
The minimum amount is Rs 1,00,000, and thereafter in multiples of Rs 50,000.
When does penal interest apply for delayed reporting?
Penal interest is levied if reporting is delayed beyond three clear working days (including the transaction date). For ICCOMS, it applies on T+0 basis if not reported by 11 PM on the same business day, though RBI may grant a grace period during stabilization.
What happens if counterfeit notes are found in chest remittances?
The entire value of counterfeit notes is debited from the bank's current account, and penal interest is levied on that amount.