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RBI Expands Note Exchange Facility to All Branches

No longer current — withdrawn, no replacement on file yet
Source: Reserve Bank of India · RBI/2012-13/428 · issued 28 Jan 2013 · ~1 min read
Quick answerRBI now mandates all bank branches, including co-operative banks and RRBs, to exchange cut/mutilated notes. If immediate adjudication isn't possible, branches must accept the notes and ensure the tenderer receives exchange value within a fortnight.

What changed

Previously, only soiled notes and clean note/coin exchange were required at all branches. Now, the facility is enlarged to include cut/mutilated banknotes at every branch. If a branch cannot adjudicate immediately, it must accept the notes, send them to the linked currency chest, and ensure the exchange value is paid within a reasonable time, say a fortnight.

What it means for you

Banks must now handle cut/mutilated notes at all branches without discrimination, expanding their cash management responsibilities. This may increase operational burden, especially for rural branches, as they need to process or forward such notes promptly. Non-compliance could lead to customer complaints and regulatory scrutiny.

Historical instruction — do not use for current compliance. This is what was required at the time; it no longer reflects current RBI requirements. If no replacement rule is linked above, that only means none is recorded on our register yet — it does not prove no later applicable rule exists. Confirm on the official RBI source below.

What banks were required to do at the time

Who it affects

All scheduled commercial banks, Co-operative banks, Regional Rural Banks (RRBs), Bank branch staff handling cash, Currency chest managers

❓ Common questions

Regulatory timeline

Built from our lineage records — each fact carries its provenance; missing history simply is not shown (never guessed).

What if my branch cannot adjudicate cut notes immediately?

Accept the notes from the customer, send them to your linked currency chest for adjudication, and ensure the customer receives the exchange value within a fortnight as per RBI Note Refund Rules, 2009.

Does this apply to all types of banks?

Yes, the directive covers all banks including co-operative banks and Regional Rural Banks (RRBs).

Are there any charges for this exchange facility?

The circular does not mention any charges; the facility should be provided without discrimination on all working days.

📜 Read the original circular — full text as issued by RBI
RBI/2012-13/428 DCM (NE) No. 3498 /08.07.18/2012-13 January 28, 2013 The Chairman and Managing Director / The Chief Executive Officer All Banks (including Co-operative banks and RRBs) Madam / Dear Sir Facility for Exchange of Notes and Coins Please refer to paras 130 and 131 of the Monetary Policy Statement 2012-13 of Reserve Bank of India announced on April 17, 2012 (copy enclosed). 2. Consequently, the scope of the guidelines contained in para 1 (a) of our Master Circular DCM (NE) No.G-1/08.07.18/2012-13 dated July 2, 2012 on “Facility for Exchange of Notes and Coins” have been enlarged as under: The facility of exchange of cut/mutilated banknotes, in addition to soiled notes and issue of good quality clean banknotes/coins, should be made available at all bank branches (including those of co-operative banks and RRBs). In case a branch, for any reason, is not able to immediately adjudicate the cut/mutilated notes across the counter, it may accept and send such notes to the currency chest to which it is linked, for adjudication and in any case ensure that the tenderer receives the exchange value as per the RBI Note (Refund) Rules, 2009, within a reasonable time, say a fortnight. This above facility should be provided to all members of public without discrimination on all working days. 3. The other instructions contained in the above circular remain unchanged. 4. The above guidelines come into force with immediate effect. Yours faithfully, (B. P. Vijayendra) Chief General Manager Encls: As above
Reproduced for reference with acknowledgment — Source: Reserve Bank of India · RBI/2012-13/428 · issued 28 Jan 2013. The plain-English explanation above is BankPulse’s own independent summary.
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Official RBI source: https://www.rbi.org.in/Scripts/NotificationUser.aspx?Id=7878&Mode=0 — Plain-English summary by BankPulse (bankpulse.ai), reviewed by our expert reviewer, CA Amit Jain. Independent platform, not affiliated with the Reserve Bank of India; is our own plain-English paraphrase, not RBI’s original wording.
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