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The Reserve Bank of India issues the Master Direction on the Currency Distribution and Exchange Scheme for bank branches and currency chests. This scheme provides financial incentives to banks for opening currency chests in under-banked states, exchanging soiled notes, adjudicating mutilated banknotes, and distributing coins. Banks receive capital and revenue cost reimbursements for eligible currency chests based on location. Banks also receive per-packet or per-piece incentives for note exchange and coin distribution based on actual transactions processed through currency chests and issue offices without submitting separate claims.
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RBI/2021-22/76 Master Direction DCM (CC) No.G-2/03.41.01/2021-22 April 01, 2021
The Chairman/Managing Director/Chief Executive Officer All Banks
Madam / Dear Sir,
Master Direction on “Currency Distribution & Exchange Scheme (CDES)” for bank branches including currency chests based on performance in rendering customer service to members of public
In terms of the Preamble, under Section 45 of the RBI Act, 1934 and 35 A of the Banking Regulation Act, 1949, the Bank issues guidelines / instructions for realising the objectives of Clean Note Policy. With a view to sustaining these objectives, the Bank has formulated a scheme of incentives titled Currency Distribution and Exchange Scheme (CDES) in order to ensure that all bank branches provide better customer services to members of public.
The Master Direction enclosed incorporates updated guidelines / circulars on the subject. The Direction will be updated from time to time as and when fresh instructions are issued.
This Master Direction has been placed on RBI website at www.rbi.org.in.
Yours faithfully,
(Ishan Shukla) Chief General Manager
Encl: As above
Annex
Master Direction on “Currency Distribution & Exchange Scheme (CDES)” for bank branches including currency chests based on performance in rendering customer service to members of public
The Currency Distribution & Exchange Scheme (CDES) 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.
Incentives
As per the scheme, banks are eligible for the following financial incentives for providing facilities for exchange of notes and coins:
| Sr. No. | Nature of Service | Particulars of Incentives |
|---|---|---|
| i) | Opening of and maintaining currency chests at centres having population of less than 1 lakh in under banked States | a. Capital Cost: Reimbursement of 50% of capital expenditure subject to a ceiling of ₹ 50 lakh per currency chest. In the North Eastern region up to 100% of capital expenditure is eligible for reimbursement subject to the ceiling of ₹ 50 lakh. b. Revenue cost: Reimbursement of 50% of revenue expenditure for the first 3 years. In the North Eastern region 50% of revenue expenditure will be reimbursed for the first 5 years. |
| ii) | Exchange of soiled notes/ adjudication of mutilated banknotes over the counter at bank branches | a. Exchange of soiled notes – ₹ 2 per packet for exchange of soiled notes up to denomination ₹ 50 b. Adjudication of mutilated notes – ₹ 2 per piece |
| iii) | Distribution of coins over counter | i. ₹ 25 per bag for distribution of coins over the counter. ii. The incentives would be paid on the basis of withdrawal from currency chest, without waiting for claims from banks. iii. Banks may put in place a system of checks and balances to ensure that coins are distributed to retail customers in small lots and not to bulk customers. iv. The distribution of coins shall be verified by RBI Regional Offices through inspection of currency chest / incognito visits to branches etc. |
