Note Sorting Machine Incentives Extended to Co-op Banks
Current · Source: Reserve Bank of India · RBI/2013-14/450 · issued 13 Jan 2014 · ~1 min read
Quick answerRBI extends NSM installation cost reimbursement to all licensed State Co-operative Banks and District Central Co-operative Banks, with immediate effect. Earlier scheme covered RRBs and UCBs.
The rule, in the simplest words
Co-operative banks can get up to 50% of Note Sorting Machine [a machine that sorts cash] installation cost back in urban areas
Co-operative banks can get up to 75% of Note Sorting Machine installation cost back in semi-urban or rural areas
This helps co-operative banks manage cash better and is part of a bigger plan to improve currency handling across all banks
All licensed State Co-operative Banks and District Central Co-operative Banks are eligible for this incentive
How it plays out — a real example
A cash management officer at a co-operative bank in a rural town can now apply for reimbursement of up to 75% of the cost of installing a new Note Sorting Machine, making it easier for them to efficiently sort and manage cash for their customers. This officer can submit a claim for the reimbursement and improve the overall cash handling process at their bank. By doing so, they are contributing to the bank's goal of providing better services to its customers.
What changed
RBI has expanded the incentive scheme for Note Sorting Machines (NSMs) to include all licensed State Co-operative Banks and District Central Co-operative Banks. Previously, this benefit was limited to RRBs and UCBs under the August 2013 circular.
What it means for you
Co-operative banks can now claim reimbursement of up to 50% of NSM installation cost in urban/metro areas and 75% in semi-urban/rural areas, improving cash management efficiency. This aligns with RBI's push for better currency handling across all bank types.
What you must do
Verify eligibility for NSM installation cost reimbursement under the expanded scheme.
Submit claims for NSM installations in line with the Master Circular dated July 1, 2013.
Ensure compliance with all existing instructions on coin vending machines and NSMs.
Acknowledge receipt of this circular to your regional RBI office.
Who it affects
All licensed State Co-operative Banks, District Central Co-operative Banks, Scheduled Commercial Banks (including RRBs and UCBs) already covered
❓ Common questions
What is the reimbursement percentage for NSM installation under this scheme?
Reimbursement is 50% of installation cost in urban/metropolitan areas and 75% in semi-urban and rural areas, as per the earlier circular.
Does this circular affect existing incentives for RRBs and UCBs?
No, the earlier scheme for RRBs and UCBs remains unchanged; this circular only extends the same benefits to co-operative banks.
📜 Read the original circular — full text as issued by RBI
RBI/2013-14/450
DCM (CC) No.G-16/03.39.01/2013-14
January 13, 2014
The Chairman & Managing Directors/
Chief Executive Officers
All Scheduled Commercial Banks
(Including RRBs, UCBs, State Cooperative Bank
& District Central Cooperative Banks)
Dear Sir / Madam,
Distribution of Banknotes & Coins – Review of Incentives & Penalties
Please refer to Sl No.4 of our Circular DCM (CC) No.G-10/03.39.01/2013-14 dated August 12, 2013 , whereby we had extended the scheme of Incentives for reimbursement of Installation of Note Sorting Machines (NSMs) to RRBs & UCBs up to 50% of cost of installation in urban / metropolitan areas and 75% in semi-urban and rural areas.
2. On a review, it has now been decided to extend the scheme of incentives for Installation of Note Sorting Machines (NSMs) to all licensed State Co-operative Banks and District Central Co-operative Banks also.
3. This revision comes into force with immediate effect. All other instructions including those for reimbursement for establishment of Coin Vending Machines contained in our Master Circular dated July 01, 2013 shall apply to all the machines including NSMs.
4. Please acknowledge receipt.
Yours faithfully,
(B.P. Vijayendra)
Principal Chief General Manager
Reproduced for reference with acknowledgment — Source: Reserve Bank of India · RBI/2013-14/450 · issued 13 Jan 2014. The plain-English explanation above is BankPulse’s own independent summary.
Example: if you are a Compliance officer at a bank this circular applies to (All licensed State Co-operative Banks, District Central Co-operative Banks, Scheduled Commercial Banks (including RRBs and UCBs) already covered), your first concrete step on “Note Sorting Machine Incentives Extended to Co-op Banks” is: “Verify eligibility for NSM installation cost reimbursement under the expanded scheme.” (RBI issued this 13 Jan 2014).
Action required: Verify eligibility for NSM installation cost reimbursement under the expanded scheme.
Action required: Submit claims for NSM installations in line with the Master Circular dated July 1, 2013.
Action required: Ensure compliance with all existing instructions on coin vending machines and NSMs.
Action required: Acknowledge receipt of this circular to your regional RBI office.
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=8696&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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