Master Direction – Facility for Exchange of Notes and Coins
UR
- Applies toAll regulated entities
- StatusIn force
- RBI text changedRBI updated this document on October 16, 2026. BankPulse is re-reading it.
- IssuedApr 01, 2026
- Amendmentsnone tracked
- Length32 points in 3 sections · 3 min read
The four dates on this rule
- PublishedApr 01, 2026The day RBI put this document out. This is the same day as the Issued date on this rule.
- Starts to applyNot statedNot stated separately in this document. Read the rule itself before you assume a start date.
- Time to get readyNot statedCannot be worked out until the day it starts to apply is known.
- Last date to actNot statedNo date to act by was found in this document. Other dates may sit inside single paragraphs.
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Numbers to remember
| ₹5,000 | Up to 20 soiled notes worth ₹5,000 a day are exchanged free at the counter. RBI Para 6 |
| 7 days | Payment for bulk soiled notes must be promised within 7 days. RBI Para 6 |
| ₹5,000, | More than 10 mutilated notes, or over ₹5,000, are accepted against a receipt. RBI Para 6 |
| ₹50,000 | Banks must take extra care when the value tendered exceeds ₹50,000. RBI Para 6 |
| 30 days | An unresolved complaint after 30 days may go to the Ombudsman. RBI Para 9 |
What it says
How firm is each point
Stated by RBI — RBI’s own paragraph says this. We have only made it plainer.
Our reading — BankPulse read RBI’s paragraph and shortened it. The paragraph is the authority, not this line.
Needs judgement — RBI leaves this to the bank to settle, so nobody can give you a fixed number here.
Can be read two ways
A point marked this way sits on an RBI paragraph that can honestly be read two ways. Our own sentence takes one of the two. BankPulse does not choose for you: read RBI’s own paragraph, at the number printed on the point, before you act on it.
Two ways — both, or either one. RBI’s paragraph joins two things in the and-or form. One reading: Both of them apply, together. The other: Either one of them, on its own, is enough.
Two ways — firm, or the usual course. RBI’s paragraph softens the duty with a hedging word instead of stating it flat. One reading: It is a firm rule, and only a rare case RBI would accept sits outside it. The other: It is the usual course, and a bank may depart from it for its own recorded reasons.
Must know
1. Facility open to everyone
Every branch must offer this facility to customers and non-customers alike.
2. No refusal of coins
A branch may not refuse coins or small notes at its counter.
3. No discrimination among customers
Every branch must offer these services to everyone, every working day.
4. Counterfeit note never returned
A counterfeit note found at the counter must never be returned or destroyed.
5. Mutilated exchange is free
Bank branches may exchange mutilated or imperfect notes free of cost.
6. Soiled note definition
A soiled note is one that turned dirty through normal wear and tear.
7. Soiled notes never reissued
A soiled note must never be reissued to the public.
8. Mutilated note definition
A mutilated note is missing a portion, or is in more than two pieces.
9. No cornering by dealers
Branches must stop the exchange facility being cornered by money changers or note dealers.
10. Imperfect note definition
An imperfect note is obliterated, shrunk, washed or altered, but not mutilated.
11. Brittle notes go to RBI
A branch may not exchange notes too brittle or charred to handle normally.
12. Small soiled notes, free
Up to 20 soiled notes worth ₹5,000 a day are exchanged free at the counter.
13. Bulk soiled notes, 7 days
Payment for bulk soiled notes must be promised within 7 days.
14. Few mutilated notes paid fast
Up to 10 mutilated notes are paid over the counter after adjudication.
15. Bulk mutilated notes, 10 pieces
More than 10 mutilated notes, or over ₹5,000, are accepted against a receipt.
16. Bulk mutilated payment, 30 days
Payment for bulk mutilated notes must be promised within 30 calendar days.
17. Extra care above ₹50,000
Banks must take extra care when the value tendered exceeds ₹50,000.
18. Bulk coin buyers need KYC
A bulk coin customer must be a KYC-compliant customer of the bank.
19. 30 days before Ombudsman
An unresolved complaint after 30 days may go to the Ombudsman.
20. Already-paid notes rejected
A note already marked paid cannot be paid again.
21. Political slogan voids note
A note with a political or religious slogan is no longer legal tender.
22. Stained notes stay legal
A note with scribbling or a stain is still legal tender.
23. Cut notes reported to RBI
Deliberately cut notes are reported by name to RBI's Issue Department.
24. Non-compliance draws penalty
Breaking any provision here is a violation that draws a penalty.
Do it
1. Note counting machines required
Every payment counter must have a note-counting machine for customers to check.
2. One bag of coins
Every branch should keep at least one bag of coins in each denomination.
3. Quarterly report to RBI
Currency Chest branches must send RBI a quarterly note-adjudication statement.
4. Officers must attend training
Prescribed Officers must attend RBI's training programmes on adjudication.
5. Notice board is required
Every branch must display a notice board about the exchange facility.
6. Surprise visits by officers
Senior officers must make surprise visits and record compliance in their reports.
Background
1. 25 paise coins delisted
Coins of 25 paise or below stopped being legal tender from June 30, 2011.
2. No automatic refund right
No one has an automatic right to recover the value of a lost or stolen note.