Master Circular – Scheme of Penalties for bank branches including Currency Chests for deficiency in rendering customer service to the members of public

RBI/2022-23/04 DCM (CC) No.G-5/03.44.01/2022-23 April 01, 2022 The Chairman/Managing Director/Chief Executive Officers All banks Master Circular – Scheme of Penalties for bank branches including Currency Chests for deficiency in rendering customer service to the members of public Please refer to the Master Circular DCM (CC) No.G-3/03.44.01/2021-22 dated April 01, 2021 on the scheme of penalties. 2. An updated version on the subject is annexed for information and necessary action. Yours faithfully, (Sanjeev Prakash) Chief General Manager Encl: As above मुद्रा प्रबंध िवभाग, 4था तल, अमर भवन, पीएम। माग�., 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 - Scheme of Penalties for bank branches including currency chests for deficiency in rendering customer service to the 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/ currency chests provide better customer service to the members of public/ linked bank branches keeping in view the objectives of Clean Note Policy and enhancing operational efficiency as part of currency management. 2. Penalties Penalties to be imposed on banks for deficiencies in exchange of notes and coins/remittances sent to RBI/operations of currency chests / replenishment of cash in ATMs etc., are as follows: Sr. Nature of Irregularity Penalty No. i. Shortages in soiled note remittances For notes in denomination up to ₹50 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. The recovery of loss and imposition of penalty shall be done immediately on detection of shortage, irrespective of number of pieces. ii. Counterfeit notes detected in soiled Penalty shall be levied in terms of the note remittances and currency chest instructions issued by DCM (FNVD) No.G- balances. 1/16.01.05/2022-23 dated April 01, 2022. iii. Mutilated notes (including deliberately ₹50/- per piece irrespective of the cut notes and built-up notes) detected denomination in addition to the loss.in soiled note remittances and The recovery of loss and imposition of currency chest balances penalty shall be done immediately on detection, irrespective of number of pieces. iv. Non-compliance with operational Penalty of ₹5000 for each instance of guidelines by currency chests detected irregularity. by RBI officials. Penalty shall be enhanced to ₹10,000 in a) Non-functioning of CCTV, non- case of repetition/ recurrence of compliance with rules/guidelines irregularity. pertaining to CCTV, recording preservation period and related issues. Penalty shall be levied immediately. b) Branch cash/documents kept in strong room (CC’s vault). c) Non-utilization of Note Sorting Machines (NSMs) for sorting of notes (NSMs not used for sorting of high denomination notes, i.e notes of denomination ₹100 and above, received over the counter or not used for sorting notes remitted to chest/RBI) v. Violation of any of the terms of ₹10,000 for any violation of agreement or agreement 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 RBI instances of violation of officials e.g. agreement/deficiency in service by the branch. The levy of such penalty shall be a) Non-issue of coins over the counter placed in public domain. to any member of public despite having stock. Penalty shall 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 surprise verification of currency chest balances at (i) bimonthly intervals by officials unconnected with the custody of currency chest and (ii) six-monthlyintervals by the officials from the Controlling Office. d) Denial of facilities/services to linked branches / linked CCs 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 by RBI of mutilated /counterfeit notes in re-issuable packets prepared by the currency chest branches. vi Non-replenishment of ATMs Penalty shall be levied in terms of provisions of circular DCM(RMMT) No. S153/11.01.01/2021-22 dated August 10, 2021, and instructions issued subsequently. 3. Operational Guidelines on levy of penalties 3.1 Competent Authority The Competent Authority to decide the nature of irregularity shall 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 shall 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, corrective action having been taken/ shall be taken, etc., shall not be considered.