RBI Reiterates Clean Note Policy: Stop Stapling, Sorting, and Writing on Notes
Current · Source: Reserve Bank of India · RBI/2012-13/500 · issued 10 May 2013 · ~1 min read
Quick answerRBI has flagged that some bank branches still staple note packets, write on watermark windows, and issue soiled notes. Banks must immediately stop these practices, use paper bands, sort notes into re-issuable and non-issuable, and issue only clean notes to the public.
The rule, in the simplest words
Do not staple money packets; use paper bands instead.
Sort notes into two piles: ones that are clean enough to give out again (re-issuable) and ones that are dirty or torn (non-issuable).
Only give clean, good notes to customers; take dirty or torn notes out of use.
Never write anything on the see-through part (watermark window) of a note.
How it plays out — a real example
Rajesh, a branch manager at a cooperative bank in rural Maharashtra, noticed his cash team still stapling bundles of ₹100 notes. After reading this RBI reminder, he immediately ordered paper bands and held a quick huddle to show everyone how to sort notes into re-issuable and non-issuable piles. Now, every customer who walks in gets only crisp, clean notes, and Rajesh feels confident the branch won't face any regulatory trouble.
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
❓ Common questions
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.
📜 Read the original circular — full text as issued by RBI
RBI/2012-13/500
DCM (NPD) No.5133/ 09.39.000/2012-13
May 10, 2013
The Chairman and Managing Director / The Chief Executive Officer
All Banks (including Co-operative banks and RRBs)
Madam / Dear Sir
Clean Note Policy
In recent periods, instances of certain branches of banks continues to follow old practices like stapling, writing number of note pieces in loose packets on watermark window of notes disfiguring the watermark impression and rendering it difficult for easy recognition have come to our notice. Further, it has also been observed that certain bank branches do not sort notes into re-issuables and non-issuables, and issue soiled notes to public. Such practices are against the “Clean Note Policy” of Reserve Bank of India.
2. In this connection we invite a reference to Reserve Bank of India’s Directive DBOD No. Dir. BC. 43/13.03.00/2001-02 dated November 7, 2001 and reiterate that:
a) banks should do away with stapling of any note packet and instead secure note packets with paper bands,
b) banks should sort notes into re-issuables and non-issuables, and issue only clean notes to public; and,
c) banks should forthwith stop writing of any kind on watermark window of bank notes.
Yours faithfully
(B. P. Vijayendra)
Chief General Manager
Reproduced for reference with acknowledgment — Source: Reserve Bank of India · RBI/2012-13/500 · issued 10 May 2013. The plain-English explanation above is BankPulse’s own independent summary.
Ensure all branches sort notes into re-issuable and non-issuable categories.
📜 Compliance
Immediately stop stapling note packets; use paper bands instead.
Issue only clean, fit notes to the public; withdraw soiled notes from circulation.
Prohibit any writing on the watermark window of bank notes.
Grouped from the action items above — a single circular may involve more than one team.
Worked example & action-note template
Example: if you are a Compliance officer at a bank this circular applies to (All commercial banks, Co-operative banks, Regional Rural Banks (RRBs), Bank branch managers and cash handling staff), your first concrete step on “RBI Reiterates Clean Note Policy: Stop Stapling, Sorting, and Writing on Notes” is: “Immediately stop stapling note packets; use paper bands instead.” (RBI issued this 10 May 2013).
Circular: RBI/2012-13/500 -- RBI Reiterates Clean Note Policy: Stop Stapling, Sorting, and Writing on Notes
Issued: 10 May 2013
Action required: Immediately stop stapling note packets; use paper bands instead.
Action required: Ensure all branches sort notes into re-issuable and non-issuable categories.
Action required: Issue only clean, fit notes to the public; withdraw soiled notes from circulation.
Action required: Prohibit any writing on the watermark window of bank notes.
Owner: ____________ Target date: ____________
Board/committee approval needed? Y / N
Evidence filed in compliance register on: ____________
Built only from this circular’s own published fields — not legal advice; always confirm against the official RBI source.
💬 Banker Discussion
Discuss this circular with fellow bankers — reply, upvote what helps, report what doesn’t belong. Be professional; no client data. Views are the commenter’s own, not BankPulse’s.
BankPulse Compliance Evidence Pack — generated 03 Aug 2026 · status cross-checked against RBI’s official withdrawal register (refreshed weekly). Official RBI source: https://www.rbi.org.in/Scripts/NotificationUser.aspx?Id=7983&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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