What changed
This is a revised and updated version of the July 2, 2012 master circular on the same subject. The core structure of incentives and penalties remains, but the circular consolidates and refreshes the scheme for bank branches and currency chests.
What it means for you
Banks must continue to ensure branches provide efficient note and coin exchange services to the public, as RBI ties financial incentives to performance. The updated circular reinforces that currency chest branches must pass on incentives to linked branches on a pro-rata basis. Non-compliance with service standards will attract penalties, so lenders should review their branch-level processes and claims submission timelines.
What you must do
- Ensure all branches, especially currency chests, comply with note and coin exchange service standards to avoid penalties.
- Submit quarterly claims for coin vending machine and coin distribution incentives within 30 days through the link office, with auditor's certificate.
- Pass on soiled note exchange incentives to linked branches on a pro-rata basis as required.
- Review and update internal processes for remitting soiled notes and adjudicated mutilated notes to RBI to claim incentives automatically.
Who it affects
All scheduled commercial banks, Urban cooperative banks, Regional rural banks, Currency chest branches, Bank branches handling note and coin exchange
What incentives are available for opening currency chests in under-banked areas?
For centers with population less than 1 lakh in under-banked states, RBI reimburses 50% of capital expenditure (up to ₹50 lakh per chest) and 50% of revenue cost for the first 3 years. In the North Eastern region, capital reimbursement can be up to 100% (capped at ₹50 lakh) and 50% of revenue cost for 5 years.
What penalties apply for shortages in soiled note remittances?
For notes in denominations up to ₹50, a penalty of ₹50 per piece is imposed for shortages in soiled note remittances and currency chest balances, in addition to the loss. The circular lists other penalties for various service deficiencies.