What changed
RBI observed that certain bank branches continue old practices like stapling note packets, writing on the watermark window of notes, and issuing soiled notes to the public. This circular reiterates the 2001 directive, emphasizing that banks must stop stapling, sort notes properly, and avoid any writing on the watermark window.
What it means for you
Banks and lenders must enforce strict compliance with the Clean Note Policy to avoid regulatory action. Non-compliance could lead to reputational risk and customer complaints. This is a reminder that operational discipline in cash handling is non-negotiable.
What you must do
- Immediately stop stapling note packets; use paper bands instead.
- Ensure all branches sort notes into re-issuable and non-issuable categories.
- Issue only clean, fit notes to the public; withdraw soiled notes from circulation.
- Prohibit any writing on the watermark window of bank notes.
Who it affects
All commercial banks, Co-operative banks, Regional Rural Banks (RRBs), Bank branch managers and cash handling staff
What is the Clean Note Policy?
It is RBI's policy to ensure that only clean, fit notes are in circulation. Banks must sort notes, avoid stapling, and not write on watermark windows.
What should we do with soiled notes?
Soiled notes should be sorted as non-issuable and not given to the public. They must be returned to RBI or destroyed as per guidelines.
Does this apply to cooperative banks and RRBs?
Yes, the circular explicitly addresses all banks including cooperative banks and Regional Rural Banks.