Date: 2021-04-01Category: Not ApplicableState: Union GovernmentCountry: India
Master Circular – Scheme of Penalties for bank branches including Currency Chests based on performance in rendering customer service to the members of public
Executive Summary:
This Master Circular from the Reserve Bank of India outlines the scheme of penalties for bank branches, including currency chests, based on their performance in rendering customer service to the public. It aims to ensure better customer service regarding the exchange of notes and coins, in line with the Clean Note Policy. The circular provides a revised and updated version of the penalty scheme for deficiencies in various areas, effective April 1, 2021.
Key Points / Main Content:
Penalties for Irregularities:
Shortages in Soiled Note Remittances and Currency Chest Balances:
Denominations up to ₹50: ₹50 per piece, plus the loss amount.
Denominations of ₹100 and above: Equal to the denomination value per piece, plus the loss amount.
The shortage amount will be recovered immediately, and penalties will be levied immediately upon detection.
Counterfeit Notes:
Penalties will be levied as per DCM FNVD No.G116.01.05/2021-22 dated April 01, 2021.
Mutilated Notes:
₹50 per piece, irrespective of the denomination.
The loss amount will be recovered immediately, and penalties will be levied immediately upon detection.
Non-Compliance by Currency Chests:
₹5,000 for each irregularity detected by RBI officials.
₹10,000 for repeated irregularities.
Specific violations include non-functioning CCTV, improper storage of cash/documents, and non-utilization of Note Sorting Machines (NSMs).
Violation of Agreement with RBI:
₹10,000 for any violation or deficiency of service.
₹5 lakh if there are more than 5 instances of violation.
Specific violations include non-issuance of coins, refusal to exchange soiled notes or adjudicate mutilated notes, non-conduct of surprise verifications, denial of services to linked branches, non-acceptance of lower denomination notes, and detection of mutilated/counterfeit notes in reissuable packets.
Operational Guidelines:
Competent Authority:
The Officer-in-Charge of the Issue Department of the Regional Office under whose jurisdiction the defaulting entity is located will decide the nature of the irregularity.
Appellate Authority:
The Controlling Office of the currency chest/branch can appeal to the Regional Director/Chief General Manager/Officer-in-Charge of the Regional Office within one month from the date of debit.
Appeals based on staff being new/untrained, lack of awareness, or corrective actions taken will not be considered.
Impact Analysis
Banks / Bank Branches:
Impact: Subject to penalties for deficiencies in customer service related to note and coin exchange, remittances, and currency chest operations. Must ensure compliance with operational guidelines to avoid penalties.
Action Required: Review and adhere to the revised penalty scheme, ensure staff training, and implement necessary controls to prevent irregularities.
Currency Chests:
Impact: Subject to penalties for irregularities in currency chest operations, including shortages, counterfeit/mutilated notes, and non-compliance with RBI guidelines.
Action Required: Implement stringent controls over currency chest operations, ensure regular surprise verifications, and comply with all RBI directives to avoid penalties.
Members of Public:
Impact: Should experience improved customer service at bank branches and currency chests regarding the exchange of notes and coins.
Action Required: Report instances of non-compliance or poor service to the relevant authorities.
Key Entities Referenced
Reserve Bank of India: The central bank of India, responsible for regulating the banking system and currency.
Master Circular: A consolidated set of instructions or guidelines issued by the Reserve Bank of India on a specific subject matter. In this case, it pertains to penalties for bank branches.
Scheme of Penalties: The framework outlining the penalties imposed on bank branches and currency chests for deficiencies in customer service related to the exchange of notes and coins.
Currency Chests: Designated branches of banks authorized by the RBI to store currency on its behalf.
Clean Note Policy: An initiative by the Reserve Bank of India to provide good quality currency notes and coins to the public.
Department of Currency Management: The department within the Reserve Bank of India responsible for managing currency operations.
Mumbai, Maharashtra: The city in Maharashtra where the Department of Currency Management is located.
Regional Office: A branch office of the Reserve Bank of India, responsible for overseeing currency chest and bank branch operations within its jurisdiction.
भारतीय �रज़व� ब�क
RESERVE BANK OF INDIA
www.rbi.org.in
RBI/2021-22/03
DCM (CC) No.G-3/03.44.01/2021-22 April 01, 2021
The Chairman/Managing Director/Chief Executive Officer
All Banks
Master Circular – Scheme of Penalties for bank branches including Currency
Chests based on performance in rendering customer service to the members of
public
Please refer to the Circular DCM (CC) No. G-1/03.44.01/2020-21 dated July 1, 2020 on
the scheme of penalties.
2. A revised and updated version on the subject is annexed for information and necessary
action.
3. This Master Circular is available on our website www.rbi.org.in.
Yours faithfully
(Ishan Shukla)
Chief General Manager
Encl: As above
मुद्रा प्रबंध िवभाग, 4था तल, अमर भवन, पीमाग� एम।., फोट�, मुंबई 400001
Department of Currency Management, 4th Floor, Amar Building, P.M. Road, Fort, Mumbai 400001
फोन/Phone: (022) 2260 3000 / 4000 फै�/Fax: (022) 2266 2442 ईमेल/E-mail: helpdcm@rbi.org.inAnnex
Master Circular on the Scheme of Penalties for bank branches including currency
chests based on performance in rendering customer service to members of public
1. The Scheme of Penalties for bank branches including currency chests has been
formulated in order to ensure that all bank branches provide better customer service to
members of public with regard to exchange of notes and coins, in keeping with the
objectives of Clean Note Policy.
2. Penalties
Penalties to be imposed on banks for deficiencies in exchange of notes and
coins/remittances sent to RBI/operations of currency chests etc. are as follows:
Sr.
Nature of Irregularity Penalty
No.
i. Shortages in soiled note For notes in denomination up to ₹ 50
remittances and currency chest
balances ₹ 50/- per piece in addition to the loss
For notes in denomination of ₹ 100 &
above
Equal to the value of the denomination per
piece in addition to the loss.
In case of shortage in soiled note
remittances/chest balances, the amount of
shortage/loss thereof will be recovered
immediately.
Penalty will be levied immediately on
detection of shortage in soiled note
remittances/chest balances, irrespective of
the number of pieces detected.
ii. Counterfeit notes detected in Penalty on account of detection of counterfeit
soiled note remittances and notes by RBI from soiled note remittance of
currency chest balances. banks and in currency chest balances shall
be levied in terms of the instructions issued
by DCM (FNVD) No.G-1/16.01.05/2021-22
dated April 01, 2021.iii. Mutilated notes detected in soiled ₹ 50/- per piece irrespective of the
note remittances and currency denomination
chest balances
In case of mutilated notes detected in soiled
note remittances and currency chest
balances, the amount of loss thereof will be
recovered immediately.
Penalty will be levied immediately on
detection of mutilated notes in soiled note
remittances / currency chest balances,
irrespective of the number of pieces
detected.
iv. Non-compliance with operational Penalty of ₹ 5000 for each irregularity.
guidelines by currency chests
detected by RBI officials Penalty will be enhanced to ₹ 10,000 in case
of repetition.
a) Non-functioning of CCTV
Penalty will be levied immediately.
b) Branch cash/documents kept in
strong room
c) Non-utilization of NSMs for
sorting of notes (NSMs not used
for sorting of high denomination
notes received over the counter or
not used for sorting notes remitted
to chest/RBI)
v. Violation of any term of agreement ₹ 10,000 for any violation of agreement or
with RBI (for opening and deficiency of service.
maintaining currency chests) or
deficiency in service in providing ₹ 5 lakh in case there are more than 5
exchange facilities, as detected by instances of violation of
RBI officials e.g. agreement/deficiency in service by the
branch. The levy of such penalty will be
a) Non-issue of coins over the placed in public domain.
counter to any member of public
despite having stock. Penalty will be levied immediately.
b) Refusal by any bank branch to
exchange soiled notes / refusal by
any currency chest branch to
adjudicate mutilated notes
tendered by any member of public
c) Non conduct of surpriseverification of chest balances, at
least at bimonthly intervals, by
officials unconnected with the
custody thereof and by the
officials from the Controlling Office
once in six months.
d) Denial of facilities/services to
linked branches of other banks.
e) Non acceptance of lower
denomination notes (i.e.
denomination of ₹ 50 and below)
tendered by members of public
and linked bank branches.
f) Detection of mutilated
/counterfeit notes in re-issuable
packets prepared by the currency
chest branches.
3. Operational Guidelines on levy of penalties –
3.1 Competent Authority –
The Competent Authority to decide the nature of irregularity will be the Officer-in-
Charge of the Issue Department of the Regional Office under whose jurisdiction the
defaulting currency chest/bank branch is located.
3.2 Appellate Authority -
i. Appeal against the decision of the Competent Authority may be made by the Controlling
Office of the currency chest/branch to the Regional Director/Chief General
Manager/Officer-in-Charge of the Regional Office concerned, within one month from
the date of debit, who may decide whether the same can be accepted/ rejected.
ii. Appeals for waiver of penalty made on grounds such as staff being new/untrained, lack
of awareness of staff, corrective action having been taken/will be taken, etc. will not be
considered.