Executive Summary:
This master circular, dated July 18, 2016, provides instructions to all banks regarding facilities for the exchange of notes and coins. It consolidates previous circulars and notifications on the subject. The circular aims to ensure that bank branches actively provide services like issuing fresh notes/coins, exchanging soiled/mutilated notes, and accepting notes/coins for transactions or exchange to the public without discrimination.
Key Points / Main Content:
* **Exchange Facilities at Bank Branches:**
* All bank branches must provide exchange facilities for notes and coins on all working days without discrimination.
* The scheme of providing exchange facilities by select currency chest branches on Sundays remains unchanged.
* Branches should publicize the availability of these facilities.
* Branches must not refuse small denomination notes or coins.
* **RBI Note Refund Rules, 2009 & Delegation of Powers:**
* All bank branches are delegated powers under Rule 2(j) of the Reserve Bank of India Note Refund Rules, 2009, to exchange mutilated/defective notes free of cost.
* **Definition of Soiled Note:**
* A soiled note is defined as one that is dirty due to normal wear and tear, including a two-piece note pasted together where both pieces belong to the same note with no essential feature missing.
* Soiled notes should be accepted for government dues and credit to public accounts but not reissued to the public.
* **Mutilated Notes:**
* Mutilated notes (missing portion or composed of more than two pieces) can be presented at any bank branch for exchange and adjudication as per RBI Note Refund Rules, 2009.
* **Unacceptable Notes:**
* Extremely brittle, burnt, charred, or stuck-up notes should not be accepted for exchange; holders should be advised to tender these notes to the concerned Issue Office.
* **Procedure for Exchange of Soiled/Mutilated Notes:**
* For up to 20 soiled notes (max value ₹5000), exchange over the counter, free of charge.
* For more than 20 soiled notes or value exceeding ₹5000, banks can accept them against a receipt and credit the value later, with service charges as permitted.
* Non-chest branches should adjudicate up to 5 mutilated notes and pay the exchange value over the counter as per NRR, 2009. If unable to adjudicate, send to the linked currency chest branch.
* For more than 5 mutilated notes (not exceeding ₹5000 in value), advise sending them to a nearby currency chest branch by insured post with bank account details.
* Currency chest branches receiving mutilated notes through insured post should credit the exchange value electronically within 30 days.
* **Grievance Redressal:**
* Tenderers aggrieved by the service can approach the Banking Ombudsman.
* **Stamping of Notes:**
* Branch Managers and Officers in charge of accounts/cash are designated as 'Prescribed Officers' to adjudicate notes.
* After adjudication, the Prescribed Officer must record their order with initials on the dated 'PAY,' 'PAID,' or 'REJECT' stamp.
* Notes bearing 'PAY,' 'PAID,' or 'REJECT' stamps should be rejected if presented again.
* **Notes with Slogans/Messages:**
* Notes with political slogans or messages are no longer legal tender and will be rejected.
* **Deliberately Cut Notes:**
* Deliberately cut, torn, altered, or tampered notes should be rejected. Report details to the Deputy General Manager, Issue Department, and local police if a large number are tendered.
* **Training:**
* Issue Offices conduct training programs for 'Prescribed Officers.'
* **Display of Notice Board:**
* Branches must display a board indicating the availability of note exchange facilities.
* **Disposal of Adjudicated Notes:**
* Full value paid notes should be remitted to chest branches, then to Issue Offices with soiled note remittances.
* Half value paid and rejected notes are held by chest branches and remitted separately or by registered/insured post.
* **Agreement between RBI and Commercial Banks:**
* Bank branches should accept coins in exchange for notes.
* They should accept coins of all denominations which are legal tender without restriction.
* Use coin counting machines or accept coins by weight for large receipts.
* **Uncurrent Coins:**
* Coins of 25 paise and below are no longer legal tender and should be retained in Small Coin Depots (SCDs) until further notice.
* **Monitoring and Control:**
* Regional/Zonal Managers should conduct surprise visits to branches and report compliance to the Head Office. Non-compliance will be viewed as a violation of RBI instructions.
Impact Analysis:
* **Bank Branches:**
* Impact: Required to provide enhanced exchange facilities, train staff, display notices, and adhere to specific procedures for handling soiled and mutilated notes.
* Action Required: Ensure all branches comply with the guidelines, train 'Prescribed Officers,' display required notices, and establish procedures for handling different types of notes and coins.
* **Bank Customers / General Public:**
* Impact: Benefit from improved and more accessible note and coin exchange facilities at all bank branches.
* Action Required: Utilize the exchange facilities at bank branches and be aware of the rules regarding acceptable and unacceptable notes/coins. Can approach Banking Ombudsman for grievances.
* **Reserve Bank of India (RBI):**
* Impact: Oversees the implementation of the policy and monitors compliance by banks.
* Action Required: Continue to conduct training programs, monitor bank compliance, and update guidelines as needed.
Key Entities Referenced
Reserve Bank of India (RBI): The central bank of India, responsible for issuing and managing the country's currency, and regulating the banking system. It is mentioned throughout the document in the context of regulations and guidelines for handling notes and coins.
Reserve Bank of India Note Refund Rules, 2009: A set of rules governing the refund or exchange of mutilated, defective, or imperfect currency notes, frequently referenced within the circular.
Government of India: The governing body of India, mentioned in relation to the Reserve Bank of India's authority and regulations concerning currency notes.
Mumbai, Maharashtra: A city in Maharashtra, India, where the Central Office of the Department of Currency Management is located.
Banking Ombudsman Scheme, 2006: A scheme for addressing grievances related to banking services, including the exchange of notes, as mentioned in the document.
Indian Coinage Act, 2011: The law governing the issuance and legal tender status of coins in India, referenced in relation to the acceptance of coins by banks.
Master Circular DCM NE No.G208.07.18201516: Previous master circular on the facility for exchange of notes and coins. Dated July 01, 2015.
Department of Currency Management: A department within the Reserve Bank of India responsible for managing currency-related matters.
RBI/2016-17/21
DCM (NE) No.G-1/08.07.18/2016-17 July 18, 2016
The Chairman and Managing Director /
The Managing Director/
The Chief Executive Officer
All Banks
Madam / Dear Sir
Master Circular – Facility for Exchange of Notes and Coins
Please refer to the Master Circular DCM (NE) No.G-2/08.07.18/2015-16 dated July
01, 2015 containing instructions on the facility for exchange of notes and coins. A
revised version of Master Circular on the subject is annexed for your information and
necessary action. This Master Circular is placed in our website www.rbi.org.in.
Yours faithfully
(P. Vijaya Kumar)
Chief General Manager
Encl. As above
Department of Currency Management, Central Office, 4th Floor, Amar Building, Sir P.M.Road, P.B.No.1379, Mumbai- 400 001(India)
Tel: + 91-22-2266 1644 Fax : + 91 -22-2267 0570 E-mail : helpdcm@rbi.org.inANNEX
Master Circular – Facility for Exchange of Notes and Coins dated July 18, 2016
1. Facility for exchange of notes and coins at bank branches
(a) All branches of banks in all parts of the country should provide the following
customer services, more actively and vigorously to the members of public so that
there is no need for them to approach the RBI Regional Offices for this purpose:
(i) Issuing fresh / good quality notes and coins of all denominations on demand,
(ii) Exchanging soiled / mutilated / defective notes, and
(iii) Accepting coins and notes either for transactions or exchange.
(b) All branches should provide the above facilities to members of public without any
discrimination on all working days. The scheme of providing exchange facility by a
few select currency chest branches on one of the Sundays in a month will remain
unchanged. The names and addresses of such bank branches should be available
with the respective banks.
(c) The availability of the above-mentioned facilities at the bank branches should be
given wide publicity for information of the public at large.
(d) None of the bank branches should refuse to accept small denomination notes
and / or coins tendered at their counters.
2. Reserve Bank of India (Note Refund) Rules, 2009 - Delegation of powers
(a) In terms of Section 28 read with Section 58 (2) of Reserve Bank of India Act,
1934, no person is entitled as a right to recover from the Government of India or RBI
the value of any lost, stolen, mutilated or imperfect currency note of the GOI or
banknote. However, with a view to mitigating the hardship to the public in genuine
cases, it has been provided that the RBI may, with the previous sanction of the
Central Government, prescribe the circumstances in, and the conditions and
limitations subject to which, the value of such currency notes or banknotes may be
refunded as a matter of grace.
(b) With a view to extending the facility for the benefit and convenience of public, all
branches of banks have been delegated powers under Rule 2(j) of Reserve Bank of
India (Note Refund) Rules, 2009 for exchange of mutilated / defective notes free of
cost.
3. Liberalized definition of a Soiled Note
In order to facilitate quicker exchange facilities, the definition of soiled note has been
liberalized. A ‘soiled note’ means a note which has become dirty due to normal wear
2and tear and also includes a two piece note pasted together wherein both the pieces
presented belong to the same note and form the entire note with no essential feature
missing. These notes should be accepted over bank counters in payment of
Government dues and for credit to accounts of the public maintained with banks.
However, in no case, these notes should be issued to the public as re-issuable notes
and shall be deposited in currency chests for onward transmission to RBI offices as
soiled note remittances for further processing.
4. Mutilated Notes – Presentation and Passing
A mutilated note is a note of which a portion is missing or which is composed of
more than two pieces. Mutilated notes may be presented at any of the bank
branches. The notes so presented shall be accepted, exchanged and adjudicated in
accordance with Reserve Bank of India (Note Refund) Rules 2009.
5. Extremely brittle, burnt, charred, stuck up Notes
Notes which have turned extremely brittle or are badly burnt, charred or inseparably
stuck up together and, therefore, cannot withstand normal handling, shall not be
accepted by the bank branches for exchange. Instead, the holders may be advised
to tender these notes to the concerned Issue Office where they will be adjudicated
under a Special Procedure.
6. Procedure for exchange of soiled/ mutilated/ imperfect notes
6.1 Exchange of soiled notes
6.1.1 Notes presented in small number: Where the number of notes presented by a
person is up to 20 pieces with a maximum value of Rs.5000 per day, banks should
exchange them over the counter, free of charge.
6.1.2 Notes presented in bulk: Where the number of notes presented by a person
exceeds 20 pieces or Rs.5000 in value per day, banks may accept them, against
receipt, for value to be credited later. Banks may levy service charges as permitted
in Master Circular on Customer Service in Banks (DBR.No.Leg.BC.21/09.07.006/
2015-16 dated July 1, 2015). In case tendered value is above Rs.50000, banks are
expected to take the usual precautions.
6.2 Exchange of mutilated and imperfect notes
6.2.1 While designated branches may continue to follow the procedure as laid down
in Part III of NRR, 2009 (www.rbi.org.in →Publications→Occassional) for exchanging
mutilated and imperfect notes and issue receipt for the notes presented for
adjudication, non-chest branches are required to follow the following procedure for
notes presented in small numbers and in bulk.
6.2.2 Notes presented in small number: Where the number of notes presented by a
person is up to 5 pieces, non-chest branches should normally adjudicate the notes
as per the procedure laid down in Part III of NRR, 2009 and pay the exchange value
3over the counter. If the non-chest branches are not able to adjudicate the mutilated
notes, the notes may be received against a receipt and sent to the linked currency
chest branch for adjudication. The probable date of payment should be informed to
the tenderers on the receipt itself and the same should not exceed 30 days. Bank
account details should be obtained from the tenderers for crediting the exchange
value by electronic means.
6.2.3 Notes presented in bulk: Where the number of notes presented by a person is
more than 5 pieces not exceeding Rs.5000 in value, should be advised to send such
notes to nearby currency chest branch by insured post giving his / her bank account
details (a/c no, branch name, IFSC, etc.) or get them exchanged thereat in person.
All other persons tendering mutilated notes whose value exceeds Rs.5000 should be
advised to approach nearby currency chest branch. Currency chest branches
receiving mutilated notes through insured post should credit the exchange value to
the account of sender by electronic means within 30 days of receipt of notes.
6.3 Tenderers aggrieved with the service provided by the banks in this regard may
approach Banking Ombudsman concerned, following the procedure as laid under
Banking Ombudsman Scheme, 2006 with the bank /postal receipts as proof for
necessary action.
7. Notes bearing "PAY"/"PAID" "REJECT" stamps
(a) Every Officer-in-charge of the branch i.e. the Branch Manager and every Officer-
in-charge of the Accounts or Cash Wing of the Branch shall act as 'Prescribed
Officer' in each branch to adjudicate the notes received at the branch for exchange in
accordance with Reserve Bank of India (Note Refund) Rules, 2009. After
adjudicating mutilated notes, the Prescribed Officer is required to record his order by
subscribing his initials to the dated 'PAY'/ 'PAID'/ 'REJECT' stamp. The 'PAY' /'PAID'
& 'REJECT' stamps should also carry the name of the bank and branch concerned
and held under the custody of the 'Prescribed Officer' to avoid misuse.
(b) Mutilated / defective notes bearing 'PAY'/'PAID' (or 'REJECT') stamp of any RBI
Issue Office or any bank branch, if presented for payment again at any of the bank
branches should be rejected under Rule 6(2) of Reserve Bank of India (Note Refund)
Rules, 2009 and the tenderer should be advised that the value of such note/s cannot
be paid since the same has already been paid as is evident from the PAY/PAID
stamps affixed on it/them. All bank branches have instructions not to issue notes
bearing PAY/PAID stamps to the public even through oversight. The branches
should caution their customers not to accept such notes from any bank or anybody
else.
8. Notes bearing slogans / political messages, etc.
Any note with slogans and message of a political nature written across it ceases to
be a legal tender and the claim on such a note will be rejected under Rule 6(3) (iii) of
Reserve Bank of India (Note Refund) Rules, 2009. Similarly, notes which are
disfigured may also be rejected under Rule 6(3) (ii) of Reserve Bank of India (Note
Refund) Rules, 2009
49. Deliberately cut notes
The notes, which are found to be deliberately cut, torn, altered or tampered with, if
presented for payment of exchange value should be rejected under Rule 6(3)(ii) of
the Reserve Bank of India (Note Refund) Rules, 2009. Although it is not possible to
precisely define deliberately cut notes, a close look at such notes will clearly reveal
any deliberate fraudulent intention, as the manner in which such notes are mutilated
will follow a broad uniformity in the shape/location of missing portions of the notes,
especially when the notes are tendered in large numbers. The details of the case
such as the name of the tenderer, the number of notes tendered and their
denominations should be reported thereafter to the Deputy/General Manager, Issue
Department, under whose jurisdiction the branch falls. The matter should also be
reported to local police in case a large number of such notes are tendered.
10. Training
Our Issue Offices conduct training programmes for 'Prescribed Officers' of bank
branches on a priority basis. As the training programmes are intended to provide
knowledge and instill confidence in the Prescribed Officers in the process of
adjudication of defective notes, it is imperative that the Prescribed Officers of the
branches are deputed for such programmes.
11. Display of Notice Board
All bank branches are required to display at their branch premises, at a prominent
place, a board indicating the availability of note exchange facility with the legend,
"SOILED/MUTILATED NOTES ARE ACCEPTED AND EXCHANGED HERE" for
information of general public. Banks should ensure that all their branches provide
facility for exchange of notes and coins not only to their customers but also others.
However, they should ensure that the note exchange facility is not cornered by
money changers / dealers in defective notes.
12. Disposal of notes adjudicated at bank branches
Regarding audit of the notes adjudicated by bank branches, the full value paid notes
have to be remitted by all branches to the chest branches with which they have been
linked and therefrom to the Issue Offices concerned together with the next soiled
note remittance in the manner already laid down. The half value paid notes and
rejected notes, which are held by the chest branches in their cash balance, may
either be remitted separately packed together with the full value paid notes or sent
by registered and insured post as and when required. The full value paid notes will
be treated as chest remittance by the Issue Office while the half value paid notes
and rejected notes will be treated as notes tendered for adjudication and processed
accordingly. All chest branches are required to submit to our Issue Offices a monthly
statement showing the number of notes adjudicated during the month.
513. Agreement between RBI and commercial banks
(a) The bank branches should accept coins in exchange of notes.
(b) They should accept coins of all denominations which are legal tender under the
Indian Coinage Act, 2011 from any member of public without any restriction and pay
the value in notes.
(c) They should use Coin counting machines or accept coins by weight for large
receipts, as hitherto to facilitate the customers.
14. Uncurrent Coins
The coins of denomination of 25 paise and below, issued from time to time, ceased
to be legal tender for payments as well as account with effect from June 30, 2011 in
terms of Gazette Notification No.2529 dated December 20, 2010 issued by the
Government of India. All such coins should be retained in the Small Coin Depots
(SCDs) of the bank till further advise from Reserve Bank of India.
15. Monitoring and Control
(a) The Regional Managers / Zonal Managers of the banks may pay surprise visits to
the branches and report the position of compliance in this regard to the Head Office
which will review such reports and take prompt remedial action, wherever necessary.
(b) Any non-compliance in this regard shall be viewed as violation of instructions
issued by the Reserve Bank of India.
6Master Circular – Facility for Exchange of Notes and Coins dated July 18, 2016
List of circulars / notifications consolidated by the Master Circular
Sr.No. Circular / Notification No. Date Subject
1. DCM(NE)No.120/08.07.18/2016-17 14.07.2016 Facility for Exchange of Soiled/
Mutilated/ Imperfect Notes
2. DCM(NE)No.3498/08.07.18/2012-13 28.01.2013 Facility for exchange of notes and
coins
3. DCM (Plg).No.6983/10.03.03/2010-11 28.6.2011 Call in from circulation coins of the
denomination of 25 paise and below
4. DCM (Plg).No.6476/10.03.03/2010-11 31.5.2011 Call in from circulation coins of the
denomination of 25 paise and below-
complaints reading non-acceptance
of
5. DCM (Plg).No.4459/10.03.03/2010-11 09.2.2011 Call in from circulation coins of the
denomination of 25 paise and below.
6. DCM (Plg).No.4137/10.03.03/2010-11 25.1.2011 Call in from circulation coins of the
denomination of 25 paise and below.
7. Gazette of India No.2529 20.12.2010 Notification for withdrawal of 25
paise and below coins
8. DCM(RMMT)No.1277/11.36.03/2010-11 24.8.2010 Exchange Facilities by Currency
Chest branches / scheme for
providing facilities
9. DCM(NE)No.1612/08.01.01/2009-10 13.9.2009 Notification of Note Refund(Rules),
2009
10. RBI/2006-07/349/DCM (NE)No.7488/08.07.18/ 25.4.2007 Acceptance of Small Denomination
2006-07 Notes and Coins.
11. DCM(RMMT)No.1181/11.37.01/2003-04 05.4.2004 Acceptance of coins.
12. DCM(NE)No.310/08.07.18/2003-04 19.1.2004 Providing facilities to public for
exchange of notes, coins, etc.
13. DCM(RMMT)No.404/11.37.01/2003-04 09.10.2003 Acceptance of coins and availability
of notes.
14. G-11/08.07.18/2001-02 02.11.2001 Reserve Bank of India (Note Refund)
Rules, 1975 – Delegation of note
exchange powers to currency chest
branches of Public/Private Sector
Banks.
15. Cy.No.386/08.07.13/2000-2001 16.11.2000 Reserve Bank of India (Note Refund)
Rules, 1975 – Delegation of full note
exchange powers to currency chest
branches of Public/ Private Sector
Banks.
16. G-67/08.07.18/96-97 18.2.1997 RBI (Note Refund) Rules, 1975,
Delegation of full powers to private
sector banks maintaining currency
chests
17. G-52/08.07.18/96-97 11.1.1997 RBI (NR) Rules Scheme of
delegation of powers to PSBs for
exchange of defective notes –
Disposal of notes bearing PAY/PAID
stamp.
718. G-24/08.01.01/96-97 03.12.1996 Acceptance of Exchange of Cut
Notes – Liberalization.
19. G-64/08.07.18/95-96 18.5.1996 RBI(NR) Rules – Delegation of full
powers to branches PSBs and
publicity for exchange of defective
notes.
20. G-71/08.07.18/92-93 22.6.1993 RBI(NR) Rules – Scheme of
delegation of full powers for
exchange of defective notes to the
branches of PSBs – Publicity.
21. G-83/CL-1(PSB)-91/92 06.5.1992 RBI(NR) Rules – Delegation of
powers to chest branches of PSBs.
22. G-74/CL-(PSB)(Gen)-90/91 05.9.1991 RBI(NR) Rules – Delegation of full
powers there under to PSBs.
23. 5.5/CL-1(PSB)-90/91 25.9.1990 RBI(NR) Rules – Scheme of
delegation of full poweres to PSBs.
24. 8/CL-1(PSB)-90/91 17.8.1990 RBI(NR) Rules – Scheme of
delegation of full powers to PSBs.
25. G-123/CL-1(PSB)(Gen)-89/90 07.5.1990 RBI(NR) Rules – Scheme of
delegation of full powers to PSBs
(Amendment).
26. G-108/CL-1(PSB)(Gen)-89/90 03.4.1990 RBI(NR) Rules 1989 – Bank notes of
Rs.500/- denomination – Exchange
of defective notes at branches of
PSBs.
27. G-8/CL-1(PSB)-89/90 12.7.1989 RBI(NR) Rules – Defective notes
branded with 'To Claims' stamp of
RBI Issue Offices.
28. G.84/CL.1(PSB)-88/89 17.3.1989 RBI(NR) Rules – Delegation of full
note exchange powers to PSBs.
29. G.66/CL.1(PSB)-88/89 09.2.1989 RBI(NR) Rules – Delegation of
powers to PSBs – Training.
30. S.12/CL-1(PSB)-88/89 30.9.1988 RBI(NR) Rules – Deliberately
mutilated notes – Adjudication.
31. G.134/CL-1(PSB)-87/89 25.5.1988 Implementation of the Scheme of
delegation of full powers under
RBI(NR) Rules.
32. 192/CL-1-(PSB)-86/87 02.6.1987 RBI(NR) Rules – Scheme of
delegation of full powers to PSBs.
33. 189/CL.2/86/87 02.6.1987 Defacing currency notes by writing
on them or inscribing messages,
slogans etc. thereon.
34. 185/CL-1(PSB)-86/87 20.5.1987 RBI(NR) Rules – Affixing of 'PAY'
and 'REJECT' stamps on defective
notes.
35. 173/CL.1/84/85 02.4.1985 Delegation of full powers to PSBs for
exchange of defective
notes/procedures of the same.
36. Cy.No.1064/CL.1/76/77 09.8.1976 Facilities to the public for exchange
of soiled notes and slightly mutilated
notes.
8