Master Direction – Facility for Exchange of Notes and Coins (Updated as on September 01, 2026)

RBI/DCM/2026-27/395 DCM (NE) No.G-2/08.07.18/2026-27

April 01, 2026 (Updated as on September 01, 2026)

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.

3. The circulars listed in Annex II and all Master Circulars/ Directions earlier issued on the subject stand withdrawn from the date of issuance of this Master Direction.

Yours faithfully,

(Suman Nath) Chief General Manager

Encl: As above

Master Direction – Facility for Exchange of Notes and Coins

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

1.1 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:

1.1.1 Issuing fresh/ good quality notes and coins of all denominations,

1.1.2 Exchanging soiled/ mutilated/ imperfect notes, and

1.1.3 Accepting coins and notes either for transactions or exchange.

1.2 Since issuance of banknotes is facilitated through ATMs on a large scale, banks/ White Label ATM Operators (WLAOs) shall strengthen their systems/ mechanisms to monitor availability of cash in ATMs and ensure timely replenishment to prevent cash-outs and thereby avoid inconvenience to members of the public.

1.3 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.

1.4 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.

1.5 None of the bank branches shall refuse to accept coins and/ or small denomination notes 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.

1.6 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.2978 dated December 20, 2010 issued by the Government of India.

1.7 All branches shall provide the above facilities to members of public without any discrimination on all working days.

1.8 The availability of the above-mentioned facilities at the bank branches shall be given wide publicity for information of the public at large.

1.9 Banks may enhance the engagement of their Business Correspondents (BCs) and may also engage Cash in Transit (CIT) entities for distribution of banknotes and coins to address the last mile connectivity issues.

1.10 Banknotes tendered over the counter of a bank branch shall be examined for authenticity through machines before providing exchange or credit. When a banknote tendered at the counter is found to be counterfeit, under no circumstance it shall be returned to the tenderer or destroyed and action should be taken as prescribed in the Master Direction on Counterfeit Notes-Detection, Reporting and Monitoring.

2. Reserve Bank of India (Note Refund) Rules, 2009 [as Amended by Reserve Bank of India (Note Refund) Amendment Rules, 2018] - Delegation of Powers

2.1 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.

2.2 The Note Refund Rules, 2009 were amended vide Reserve Bank of India (Note Refund) Amendment Rules, 2018 notified in the Gazette of India on September 6, 2018 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 ₹50 and above denominations were also revised.

2.3 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 (as amended in 2018) for exchange of mutilated/ imperfect notes, free of cost.

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 for exchange or credit to accounts of the public maintained with banks or in payment of Government dues. 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 (CCs) for onward transmission to RBI offices as soiled note remittances for further processing.