**Policy Summary: Withdrawal of Incentives under Currency Distribution Exchange Scheme (CDES)**
This circular, RBI201718136 DCM (CC) No. 3071/03.41.01/2017-18, issued by the Reserve Bank of India (RBI) on March 1, 2018, announces the withdrawal of incentives previously provided to banks for the installation of Cash Recyclers and Automated Teller Machines (ATMs) dispensing only lower denomination notes. These incentives were initially established to encourage technology adoption in currency operations and improve customer service, as outlined in the Master Direction DCM (CC) No.G-403.41.01/2016-17 dated July 20, 2016. The RBI has determined that the objectives of the CDES have largely been achieved, thus prompting the withdrawal of these specific incentives. This policy change takes effect immediately. Claims for machines delivered to banks on or before March 1, 2018, will be settled by the RBI's Regional Offices, subject to the limits specified in the Master Direction of July 20, 2016. The circular is accessible on the RBI website (www.rbi.org.in). Contact: Ajay Michyari, Chief General Manager.
Key Entities Referenced
RBI: Reserve Bank of India, the central bank of India, which issued the circular.
Currency Distribution Exchange Scheme (CDES): A scheme by RBI to incentivize banks for technology absorption in their currency operations.
BiMonthly Review of Monetary Policy: A monetary policy review published by the RBI. Reference is made to the review dated February 7, 2018.
Cash Recyclers: Machines installed by banks for currency operations.
ATMs: Automated Teller Machines, dispensing lower denomination notes.
Master Direction DCM CC No.G 403.41.01201617: RBI Master Direction document related to currency management, dated July 20, 2016.
Ajay Michyari: Chief General Manager at RBI, who signed the circular.
Regional offices: Offices of RBI which would settle claims related to the machines delivered to banks before the date of the circular.
RBI/2017-18/136
DCM (CC) No. 3071/03.41.01/2017-18 March 01, 2018
The Chairman & Managing Director /
Chief Executive Officer,
All Banks
Madam / Dear Sir,
Review of Currency Distribution & Exchange Scheme (CDES)
Please refer to the announcement made in Part B of the Bi-Monthly Review of Monetary
Policy dated February 7, 2018. The RBI has been providing several incentives to banks,
from time to time for installation of various machines by them to encourage technology
absorption in their currency operations for improved customer service. It is observed that
the objectives of the scheme have largely been achieved.
2. Therefore, on a review, it has been decided to withdraw the incentives which was
being given to the banks for installation of Cash Recyclers and ATMs dispensing only
lower denomination notes as contained in the Master Direction DCM (CC) No.G-
4/03.41.01/2016-17 dated July 20, 2016.
3. The above instructions will come into force with immediate effect. The claims in
respect of machines which were delivered to the banks before and including the date of
the circular, shall be settled by our Regional offices, subject to the limits already advised in
the above Master Direction dated July 20, 2016.
4. The circular is available on our website – www.rbi.org.in.
Yours faithfully,
(Ajay Michyari)
Chief General Manager