Facility for Exchange of Notes and Coins Master Direction

RBI/2025-26/133 DCM (NE) No.G-5/08.07.18/2025-26 April 01, 2025

The Chairman / Managing Director / Chief Executive Officer All Banks

Madam / Dear Sir,

Master Direction – Facility for Exchange of Notes and Coins

In exercise of the powers conferred under Section 35A of the Banking Regulation Act, 1949, read with sections 28, 38, 39, 58(1) and 58(2)(q) of the Reserve Bank of India Act, 1934, Reserve Bank of India (RBI), from time-to-time issues guidelines / instructions / directives to the banks on provision of Facility for Exchange of Notes and Coins to members of public.

2. A Master Direction incorporating and updating the extant guidelines / instructions / directives on Facility for Exchange of Notes and Coins has been prepared to enable banks to have all current instructions on the subject at one place for reference and the same is enclosed.

Yours faithfully,

(Suman Nath) Chief General Manager

Encl: As above

Index

Master Direction – Facility for Exchange of Notes and Coins

In exercise of the powers conferred under Section 35A of the Banking Regulation Act, 1949, read with sections 28, 38, 39, 58(1) and 58(2)(q) of the Reserve Bank of India Act, 1934, the Reserve Bank of India being satisfied that it is necessary and expedient in the public interest to do so, hereby, issues the Directions hereinafter specified.

1. Facility for Exchange of Notes and Coins at Bank Branches

• (a) All bank branches in all parts of the country are mandated to provide following customer services, more actively and vigorously to the members of public so that there is no need for them to approach RBI Regional Offices for this purpose:
  • (i) Issuing fresh / good quality notes and coins of all denominations,
  • (ii) Exchanging soiled / mutilated / imperfect notes, and
  • (iii) Accepting coins and notes either for transactions or exchange.
• (b) Banks shall ensure that all their branches provide facility for exchange of notes and coins not only to their customers but also others. Small Finance Banks (up to two years from the commencement of their banking business) and Payment Banks may exchange mutilated and imperfect notes at their option.
• (c) Considering that handling coins packed in sachets of 100 pieces each or small value-based sachets would be more convenient for the cashiers as well as the customers, such sachets shall be kept at the counters and made available to the customers.
• (d) All branches shall provide the above facilities to members of public without any discrimination on all working days.
• (e) The availability of the above-mentioned facilities at the bank branches shall be given wide publicity for information of the public at large.
• (f) None of the bank branches shall refuse to accept small denomination notes and / or coins tendered at their counters. All coins in the denomination of 50 paise, ₹1, ₹2, ₹5, ₹10 and ₹20 of various sizes, theme and design issued from time to time by the Government of India continue to be legal tender.
• (g) Uncurrent Coins - The coins of 25 paise and below, issued from time to time have ceased to be legal tender with effect from June 30, 2011 in terms of Gazette Notification No. 2529 dated December 20, 2010 issued by the Government of India.

2. Reserve Bank of India (Note Refund) Rules, 2009 [as Amended by Reserve Bank of India (Note Refund) Amendment Rules, 2018] - 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 hardship to the public in genuine cases, it has been provided that the RBI may, with prior 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 bank branches have been delegated powers under Rule 2(j) of Reserve Bank of India (Note Refund) Rules, 2009 [as amended by Reserve Bank of India (Note Refund) Amendment Rules, 2018] (hereinafter referred to as NRR, 2009) for exchange of mutilated / imperfect notes free of cost.
• (c) The NRR, 2009 were amended to enable the public to exchange mutilated notes in Mahatma Gandhi (New) series, which are smaller in size as compared to the banknotes of earlier series. The minimum area of the single largest undivided piece of the note required for payment of full value for notes of rupees fifty and above denominations were also revised. The Reserve Bank of India (Note Refund) Amendment Rules, 2018 were notified in the Gazette of India on September 6, 2018.

3. Soiled Note

In order to facilitate quicker exchange facilities, the definition of soiled note has been expanded. A ‘soiled note’ means a note which has become dirty due to normal wear and 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 shall 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 shall be issued to the public as re-issuable notes, and such notes shall be deposited in currency chests for onward transmission to RBI offices as soiled note remittances for further processing.

4. Mutilated and Imperfect Notes – Presentation and Passing

(a) Mutilated notes

A mutilated note is a note of which a portion is missing or which is composed of more than two pieces. Mutilated notes shall be presented at any of the bank branches. The notes so presented shall be accepted, exchanged and adjudicated in accordance with NRR, 2009. The branches shall take steps to see that the exchange facilities are not cornered by private money changers or professional dealers of defective notes.

(b) Imperfect Notes

Imperfect note means any note, which is wholly or partially, obliterated, shrunk, washed, altered or indecipherable but does not include a mutilated note. Imperfect notes which can withstand normal handling shall be presented at any of the bank branches for exchange. The notes so presented shall be accepted, exchanged and adjudicated in accordance with NRR, 2009.

5. Notes which cannot withstand Normal Handling

Notes which have turned extremely brittle, 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 shall be advised to tender these notes to any of the Issue Office of Reserve Bank of India located at Ahmedabad, Bangalore, Belapur (Navi Mumbai), Bhopal, Bhubaneswar, Chandigarh, Chennai, Guwahati, Hyderabad, Jaipur, Jammu, Kanpur, Kolkata, Lucknow, Mumbai, Nagpur, New Delhi, Patna, and Thiruvananthapuram and a currency chest managed by the RBI at Kochi, where they will be adjudicated under a Special Procedure. Tenderer shall also be informed that such notes can also be sent to any of the abovementioned Issue Offices of Reserve Bank of India through Insured Post/ Registered Parcel giving his / her bank account details (a/c no, branch name, IFSC, etc.) for exchange purpose.