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.
What you must do
- Train branch staff on accepting and forwarding cut/mutilated notes per RBI Note Refund Rules, 2009.
- Establish clear procedures for branches to send such notes to linked currency chests for adjudication.
- Ensure all branches display this facility prominently and serve all customers without discrimination.
- Monitor turnaround time to ensure exchange value is provided within a fortnight for forwarded notes.
Who it affects
All scheduled commercial banks, Co-operative banks, Regional Rural Banks (RRBs), Bank branch staff handling cash, Currency chest managers
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.