What changed
RBI issued a new Master Direction (DCM (NE) No.G-2/08.07.18/2026-27) that consolidates and updates all previous circulars on note and coin exchange. All earlier Master Circulars and Directions on this subject are withdrawn. The new direction mandates banks to actively provide exchange services to all members of public, not just account holders.
What it means for you
Banks must now treat note and coin exchange as a core customer service, with no refusal to accept coins or small denomination notes. ATMs must be monitored to prevent cash-outs. Small Finance Banks under 2 years old and Payment Banks have flexibility on mutilated note exchange. This reduces public dependency on RBI offices for such services.
What you must do
- Ensure all branches provide note and coin exchange to both customers and non-customers without refusal.
- Strengthen ATM cash monitoring and replenishment systems to avoid cash-outs.
- Keep coin sachets (100 pieces or small value) readily available at counters.
- Train staff on handling soiled, mutilated, and imperfect notes per RBI rules.
- Display notice boards with exchange facility details at all branches.
Who it affects
All scheduled commercial banks, Small Finance Banks (up to 2 years old), Payment Banks, White Label ATM Operators (WLAOs), Bank branch staff handling cash counters
Are banks required to exchange notes and coins for non-customers?
Yes, the Master Direction mandates all bank branches to provide exchange facilities to all members of the public, not just their own customers.
Can banks refuse to accept coins or small denomination notes?
No, banks cannot refuse to accept coins or small denomination notes tendered at counters. All coins of 50 paise, ₹1, ₹2, ₹5, ₹10, and ₹20 remain legal tender.
Do Small Finance Banks and Payment Banks have to exchange mutilated notes?
Small Finance Banks up to two years from commencement and Payment Banks may exchange mutilated and imperfect notes at their option, meaning it is not mandatory for them.