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Banks having currency chests must report all currency chest transactions through the CyM – CC portal on the same day by 7 pm. The Reserve Bank levies penal interest at the rate of 2% over the prevailing Bank Rate for delayed reporting, wrong reporting, non-reporting, and the inclusion of ineligible amounts in currency chest balances. Currency chests must ensure that transactions meet the minimum amount of one lakh rupees and multiples of fifty thousand rupees thereafter. Banks must submit any representations regarding penal interest to the Issue Office concerned within one month from the date of debit.
What you must do
Who is affected
Thresholds
Exceptions
If you do not comply
Ask about this master direction
RBI/2021-22/77 Master Direction DCM (CC) No.G-4/03.35.01/2021-22 April 01, 2021
The Chairman/ Managing Director/Chief Executive Officer (All Banks having Currency Chests)
Madam / Dear Sir
Master Direction on Levy of Penal Interest for Delayed Reporting / Wrong Reporting / Non-Reporting of Currency Chest Transactions and Inclusion of Ineligible Amounts in Currency Chest Balances
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 our Clean Note Policy. With a view to sustain these efforts and to ensure discipline among the banks on timely and accurate reporting of currency chest transactions, we have issued instructions on the subject.
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 Levy of Penal Interest for Delayed Reporting / Wrong Reporting / Non-Reporting of Currency Chest Transactions and Inclusion of Ineligible Amounts in Currency Chest Balances
1.1 Reporting of Currency Chest Transactions The minimum amount of deposit into / withdrawal from currency chest will be ₹ 1,00,000 and thereafter, in multiples of ₹ 50,000.
1.2 Time limit for Reporting
1.2.1 The currency chests should invariably report all transactions through CyM – CC portal on the same day by 7 pm.
1.2.2 Relaxation in respect of strike period in banks Relaxation in the reporting period on account of strike situation will be considered on case-to-case basis.
1.3 Levy of penal interest –
1.3.1 Delay in Reporting - In the event of delay in reporting currency chest transactions, penal interest at the rate indicated in paragraph 3 of this circular will be levied on the amount due from the chest holding bank for the period of delay. Penal interest will be calculated on T+0 basis i.e. penal interest will be levied in respect of transactions not reported by currency chests to the Issue Office on the same business day within the time limit prescribed above.
1.3.2 Wrong reporting Penal interest will be levied in respect of cases of wrong reporting in the same manner till the date of receipt of corrected advice by Reserve Bank. As debits/credits to banks' current accounts are raised on the basis of the transactions reported by the currency chests, penal interest will invariably be levied in all cases of wrong reporting by the currency chests. It is expected that currency chests would ensure the correctness of figures reported on the CyM - CC portal. Particular care should be taken to ensure that remittances of fresh notes/notes to the currency chests are not reported as 'deposit' transactions on the portal.
1.3.3 Penal interest for inclusion of ineligible amounts in the currency chest balances
2 Levy of penalty
2.1 Reporting of Soiled note remittances to RBI Soiled note remittances to RBI should not be shown as withdrawal by chest/s. In case such remittances to RBI are wrongly reported as 'withdrawals', a penalty of ₹ 50,000 will be levied irrespective of the value of remittance and period of such wrong reporting.
2.2 Reporting of diversions in CyM – CC portal All currency chest diversions (both between chests of the same bank and between chests of different banks) have to be reported through ‘Diversion Module’ of CyM-CC Portal. The CC sending the diversion should initiate the diversion entry. The receiving CC should acknowledge the same. Diversions must not be reported as Deposit/Withdrawal. A penalty of ₹ 50,000 will be levied for such wrong reporting.
2.3 Delayed reporting where currency chests had “Net Deposit” Penal interest at the prevailing rate for delayed reporting of the instances where the currency chest had reported “net deposit” may not be charged. However, in order to ensure proper discipline in reporting currency chest transactions, a flat penalty of ₹ 50,000 may be levied on the currency chests for delayed reporting irrespective of the value of net deposit.
Rate of penal interest Penal interest shall be levied at the rate of 2% over the prevailing Bank Rate for the period of delayed reporting/wrong reporting/non-reporting /inclusion of ineligible amounts in chest balances.
Representations
4.1 As the sole criterion for levy of penal interest for delayed reporting is the number of days of delay, there should ordinarily be no occasion for banks to request for reconsideration of the Reserve Bank's decision in individual cases. However, representations, if any, on account of genuine difficulties faced by chests especially in hilly/remote areas and those affected by natural calamities, etc., may be made to the Issue Office concerned through the Head / Controlling office of the bank concerned within a month from the date of debit of the bank concerned.
4.2 In the case of wrong reporting representations for waiver will not be considered. {cf. para 1.3.2 above}.
4.3 As the intention behind the levy of penal interest is to inculcate discipline among banks so as to ensure prompt/correct reporting, pleas by banks for waiver of penal interest on grounds that delayed/wrong/non-reporting did not result in utilization of the Reserve Bank's funds or shortfall in the maintenance of CRR/SLR or that they were the result of clerical mistakes, unintentional or arithmetical errors, first time error, inexperience of staff etc., will not be considered as valid grounds for waiver of penal interest. Further, we will take a serious view of all such lapses.
