RBI Allows Banks to Use BCs and CIT Entities for Cash Distribution
No longer current — withdrawn, no replacement on file yet
Source: Reserve Bank of India · RBI/2013-14/244 · issued 10 Sep 2013 · ~1 min read
Quick answerRBI has directed banks to explore using Business Correspondents and Cash-in-Transit entities for distributing banknotes and coins, aiming to improve last-mile connectivity and meet growing cash demand.
What changed
RBI has formally advised banks to consider engaging Business Correspondents and Cash-in-Transit entities for currency distribution, following a September 2, 2013 circular that expanded BC scope to include cash handling. This operational shift allows banks to leverage non-branch channels for note and coin distribution.
What it means for you
Banks can now offload cash distribution to BCs and CIT firms, reducing branch congestion and extending reach to underserved areas. This may lower operational costs and improve service efficiency, but requires robust oversight to ensure security and compliance with currency management norms.
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
Review your current BC agreements to include currency distribution as a permitted activity.
Engage with CIT entities to formalize last-mile cash delivery arrangements.
Update internal policies and training for BCs on secure handling of banknotes and coins.
Ensure compliance with RBI's September 2, 2013 circular on BC activities.
Monitor and report cash distribution performance to RBI as required.
Who it affects
All Scheduled Commercial Banks including RRBs, Business Correspondents, Cash-in-Transit entities, Bank customers in remote areas
RBI’s words: “and DCM (Plg) No. G 12 /10.65.03/2013-14 dated September 10, 2013”
📜 Read the original circular — full text as issued by RBI
RBI/2013-14/244
DCM (Plg) No.G12/10.65.03/2013-14
September 10, 2013
The Chairman & Managing Director /
Chief Executive Officer
(All Scheduled Commercial banks including RRBs)
Madam/ Dear Sir,
Monetary Policy Statement for 2013-14 - Distribution of Banknotes and Coins – Alternative Avenues
Please refer to Para 110 of the Monetary Policy Statement 2013-14 wherein it was stated that “With a view to effectively meeting the growing demand for banknotes and coins in the country, there is a need for identification of alternative avenues for their distribution by banks. For this purpose, banks may explore the possibility of offering these services through Business Correspondents (BC) and consider engaging the services of Cash in Transit (CIT) entities for the purpose of distribution of banknotes and coins, thereby addressing the last mile connectivity issues.”
2. We invite attention to DBOD circular No.BAPD.BC. 46/22.01.009/2013-14 dated September 2, 2013 , permitting banks to include distribution of banknotes and coins also in the scope of activities which may be undertaken by Business Correspondents (BCs).
3. Banks are accordingly advised to explore the possibility of enlisting the services of their BCs for carrying out the various currency management functions.
4. Please acknowledge receipt.
Yours faithfully
(B P Vijayendra)
Principal Chief General Manager
Reproduced for reference with acknowledgment — Source: Reserve Bank of India · RBI/2013-14/244 · issued 10 Sep 2013. The plain-English explanation above is BankPulse’s own independent summary.
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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=8399&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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