What changed
This Master Direction consolidates and updates previous circulars on the Currency Distribution and Exchange Scheme (CDES). It formalizes the incentive framework for bank branches and currency chests based on performance in customer service related to clean note policy. The key change is the codification of existing guidelines into a single master direction.
What it means for you
Banks can now claim financial incentives for currency chests in underbanked areas, soiled note exchange, and coin distribution without separate claims. This encourages better customer service and infrastructure in underserved regions. Banks must ensure proper documentation and pass on incentives to linked branches.
What you must do
- Set up currency chests in centres with population under 1 lakh in underbanked states to claim capital and revenue cost reimbursements.
- Ensure soiled note exchange and mutilated note adjudication are done over the counter to claim ₹2 per packet/piece.
- Distribute coins and claim ₹65 per bag, plus ₹10 extra for rural/semi-urban areas with concurrent auditor certificate.
- Pass on incentives to linked branches/chests on a pro-rata basis for soiled notes and coins.
- Maintain records for RBI verification through inspections or incognito visits.
Who it affects
All scheduled commercial banks, Currency chest branches, Bank branches in rural and semi-urban areas, Banks operating in underbanked states and North Eastern region
Do we need to submit separate claims for incentives?
No, incentives are paid automatically based on net withdrawal from currency chest for coins and receipt of soiled notes in RBI Issue Office. No separate claim is needed.
What is the incentive for setting up a currency chest in the North Eastern region?
Capital expenditure is reimbursed up to 100% subject to a ceiling of ₹50 lakh per chest. Revenue expenditure is reimbursed at 50% for the first 5 years.
How is coin distribution incentive calculated for rural areas?
You get ₹65 per bag for coin distribution, plus an additional ₹10 per bag for rural and semi-urban areas, provided a Concurrent Auditor certificate is submitted.