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The Reserve Bank of India issues the master direction for the Currency Distribution and Exchange Scheme. All banks qualify for financial incentives and service charges to set up infrastructure and facilitate the exchange and distribution of currency notes and coins. Banks must meet specific conditions to receive capital cost reimbursements, revenue cost support, and service charges for soiled notes, mutilated notes, and coin distribution. Currency chest branches pass these incentives to linked branches on a pro-rata basis.
What you must do
Who is affected
Thresholds
Ask about this master direction
RBI/DCM/2024-25/113 DCM (CC) No.G-3/03.41.01/2024-25 April 1, 2024
The Chairman / Managing Director / Chief Executive Officer All banks
Madam / Dear Sir,
Master Direction on Framework of incentives for Currency Distribution & Exchange Scheme for bank branches including currency chests
In terms of the Preamble to and Section 45 of the Reserve Bank of India Act, 1934 (RBI Act) and Section 35A of the Banking Regulation Act, 1949, Reserve Bank of India issues guidelines / instructions for realising the objectives of Clean Note Policy as part of currency management. With a view to furthering these objectives, the Bank has formulated a framework of incentives titled Currency Distribution and Exchange Scheme (CDES) to encourage all the bank branches to provide better customer services to the members of public.
Yours faithfully,
(Sanjeev Prakash) Chief General Manager
Encl: As above
Annex
Master Direction on Framework of Incentives for “Currency Distribution & Exchange Scheme (CDES)” for bank branches including currency chests
The framework of incentives, titled Currency Distribution & Exchange Scheme (CDES) for bank branches including Currency Chests (CCs), based on performance in rendering customer service to the members of public has been formulated to encourage all the bank branches to provide better customer service to the members of public keeping in view the objectives of Clean Note Policy.
Incentives
As per the scheme, banks are eligible for the following financial incentives / service charges for setting up requisite infrastructure and facilitating exchange / distribution of notes and coins:
| Sr. No. | Nature of Service | Particulars of Incentives / Service Charges |
|---|---|---|
| i | Opening of and maintaining CCs at centres having population of less than 1 lakh, in underbanked states | a. Capital Cost: Reimbursement of 50% of capital expenditure (inclusive of all taxes) subject to a ceiling of ₹50 lakh per CC. In the North Eastern region, up to 100% of capital expenditure is eligible for reimbursement subject to the ceiling of ₹50 lakh (inclusive of all taxes). b. Revenue cost: Reimbursement of 50% of revenue expenditure (inclusive of all taxes) for the first 3 years. In the North Eastern region, 50% of revenue expenditure (inclusive of all taxes) is eligible for reimbursement for the first 5 years. |
| ii | Exchange of soiled notes / adjudication of mutilated notes over the counter at bank branches | a. Exchange of soiled notes – ₹2/- per packet for exchange of soiled notes in the denominations up to ₹50/- and below. b. Adjudication of mutilated notes – ₹2/- per piece. |
| iii | Distribution of coins | a. ₹65/- per bag1 for distribution of coins. b. An additional incentive of ₹10/- per bag shall be paid for coin distribution in rural and semi-urban areas on the submission of a Concurrent Auditor (CA) certificate to this effect. |
| iv | Cash deposit by non-chest branches under Linkage scheme with CCs | Service charge to be levied by the CC on the non-chest branches a. Large modern CCs2 – ₹8/- per 100 pieces. b. Other CCs – ₹5/- per 100 pieces. |
1 For incentive calculation, 5000 pieces of 50 paise coins; 2500 pieces of ₹1, ₹2 or ₹5 coins; 2000 pieces of ₹10 or ₹20 coins would be deemed to constitute one bag.
2 Large modern CCs are those CCs which fulfil the Minimum Standards for a CC as detailed in the circular RBI/2018-19/166 DCM(CC) No. 2842/03.39.01/2018-19 dated April 08, 2019.
