What changed
The incentive for coin distribution per bag has been increased from ₹25 to ₹65, with an extra ₹10 for rural and semi-urban areas upon CA/Auditor certification. Banks are now allowed to provide coins to bulk customers (over 1 bag per transaction) for business purposes, subject to KYC and due diligence. The circular also mandates minimum stock of one bag per denomination at each branch and encourages use of Business Correspondents and Cash-in-Transit entities for wider distribution.
What it means for you
Banks will receive higher financial incentives for coin distribution, improving profitability from this activity, especially in rural and semi-urban branches. The shift to allow bulk customer supply and engage BCs/CIT entities expands distribution channels, reducing coin shortages. However, banks must ensure robust record-keeping and compliance to prevent misuse, and pass on incentives promptly to linked branches.
What you must do
- Update internal systems to claim the revised ₹65 per bag incentive from currency chests, effective September 1, 2021.
- Ensure currency chest branches pass on incentives to linked branches within one week of receipt from RBI.
- Implement a policy for supplying coins to bulk customers (over 1 bag) with KYC compliance and transaction records.
- Maintain minimum stock of one bag per coin denomination at each branch and engage BCs/CIT entities for distribution.
- Prepare for RBI verification of coin distribution during inspections and incognito visits.
Who it affects
All Scheduled Commercial Banks including RRBs, Currency chest branches, Bank branches in rural and semi-urban areas, Business Correspondents (BCs), Cash-in-Transit (CIT) entities, Bulk customers (businesses requiring >1 bag coins)
What is the new incentive for coin distribution and when does it take effect?
The incentive is ₹65 per bag, up from ₹25, effective September 1, 2021. An additional ₹10 per bag is available for distribution in rural and semi-urban areas, subject to a CA/Auditor certificate.
Can banks now supply coins to bulk customers?
Yes, banks can provide coins to bulk customers (requiring more than one bag per transaction) for business purposes, provided they are KYC-compliant and records are maintained. Due diligence is required to prevent misuse.
What are the minimum stock requirements for coin denominations?
All bank branches must maintain a minimum stock of one bag of coins in each denomination to ensure steady supply to bulk customers and Business Correspondents.