What changed
This is a revised Master Circular dated July 2, 2012, superseding the July 1, 2011 version. It consolidates existing instructions on note and coin exchange facilities. The definition of soiled notes was liberalized to include two-piece notes pasted together from the same note with no missing essential features.
What it means for you
Banks must ensure all branches actively provide fresh notes, coins, and exchange soiled notes on demand. Designated currency chest branches are responsible for mutilated/defective note exchange. Banks cannot refuse small denomination notes/coins. Soiled notes can be accepted for government dues and account credits but not reissued.
What you must do
- Ensure all branches provide fresh notes, coins, and exchange soiled notes on demand without discrimination.
- Designate currency chest branches for mutilated/defective note exchange and maintain Sunday exchange services.
- Publicize the availability of these facilities widely for public awareness.
- Accept small denomination notes and coins tendered at counters without refusal.
- Deposit soiled notes in currency chests for RBI processing; do not reissue them.
Who it affects
All scheduled commercial banks, Currency chest branches, Bank branch staff handling cash, Public customers seeking note/coin exchange
What is the liberalized definition of a soiled note?
A soiled note includes notes dirty from wear and tear, and also a two-piece note pasted together where both pieces belong to the same note and form the entire note with no essential feature missing.
Which branches handle mutilated note exchange?
Designated bank branches, which are currently currency chest branches, handle mutilated/defective note exchange under RBI's Note Refund Rules, 2009.
Can banks refuse to accept small denomination notes or coins?
No, all bank branches must not refuse to accept small denomination notes and/or coins tendered at their counters.