What changed
This 2010 Master Circular consolidates and updates the 2002 circular on note and coin exchange. It reiterates that all branches must provide exchange services, not just RBI offices. It also specifies that single/double numbered notes in not more than two pieces with essential features are treated as soiled notes for easier exchange.
What it means for you
Banks must ensure every branch actively exchanges soiled notes and coins, and accepts small denominations without refusal. Designated currency chest branches have full delegated powers under the Note Refund Rules 2009 to handle mutilated notes free of cost. This reduces public dependence on RBI offices and improves customer service.
What you must do
- Ensure all branches provide exchange of soiled notes and coins, and accept small denomination notes/coins without refusal.
- Designate currency chest branches to handle mutilated notes under the Note Refund Rules 2009 and publish their addresses.
- Train staff to treat cut notes (single/double numbered, in two pieces with essential features) as soiled notes and not reissue them.
- Deposit unfit notes into currency chests for RBI remittance; never reissue them to the public.
Who it affects
All scheduled commercial banks, Currency chest branches, Bank branch staff handling cash counters, General public exchanging notes and coins
What types of cut notes can be exchanged at any bank branch?
Single numbered notes (Re.1, Rs.2, Rs.5) and double numbered notes (Rs.10 to Rs.1000) that are in not more than two pieces, with no essential feature missing, and both pieces from the same note can be exchanged as soiled notes.
Who is authorized to exchange mutilated notes?
Designated bank branches, which are currently currency chest branches, have full delegated powers under the Reserve Bank of India (Note Refund) Rules, 2009 to exchange mutilated notes free of cost.
Can banks refuse to accept small denomination notes or coins?
No, RBI mandates that no bank branch or staff should refuse to accept small denomination notes and/or coins tendered at their counters.