Laws and sections by number or title, due dates, pages, and updates.
Reserve Bank of India issues a master direction on penalties for bank branches and currency chests for deficiencies in customer service and currency management. The framework covers note and coin shortages, counterfeit currency, mutilated notes, non-compliance with operational guidelines, and violations of currency chest agreements. Affected banks must pay prescribed financial penalties immediately upon detection of irregularities. The controlling office may appeal penalties within one month to the regional office through the CyM-CC portal.
What you must do
Who is affected
If you do not comply
Ask about this master direction
RBI/2023-24/100 DCM (CC) No.G-3/03.44.01/2023-24 April 03, 2023 The Chairman/Managing Director/Chief Executive Officers All banks Madam / Dear Sir, Master Direction – Scheme of Penalties for bank branches and Currency Chests for deficiency in rendering customer service to the members of public In terms of the Preamble to and Section 45 of the RBI Act, 1934 and Section 35 A of the Banking Regulation Act, 1949; Reserve Bank of India issues guidelines / instructions for realising the objectives of Clean Note Policy and enhancing the operational efficiency as part of currency management. In order to ensure all bank branches provide proper customer service, the Bank has formulated a Scheme of Penalties for bank branches including Currency Chests, for deficiency in rendering customer service to the members of public.
Yours faithfully (Sanjeev Prakash) Chief General Manager Encl: As above
Annex Master Direction on the Scheme of Penalties for bank branches and currency chests for deficiency in rendering customer service to members of public
The Scheme of Penalties for bank branches including currency chests has been formulated in order to ensure that all bank branches / currency chests provide better customer service to the members of public / linked bank branches keeping in view the objectives of Clean Note Policy and enhancing operational efficiency.
Penalties Penalties to be imposed on banks for deficiencies in remittances sent to RBI, compliance with operational guidelines and Memorandum of Agreement, exchange of notes and coins, operations of currency chests, replenishment of cash in ATMs, etc., are as follows:
| Sr. No. | Nature of Irregularity | Penalty |
|---|---|---|
| i. | Shortages of notes in soiled note remittances and shortages of notes and coins in currency chest balances
For notes in denomination up to ₹50 For notes in denomination of ₹100 & above For coins in all denominations The recovery of loss and imposition of penalty shall be done immediately on detection of shortage, irrespective of number of pieces. | ₹50/- per piece in addition to the loss.
Equal to the value of the denomination per piece in addition to the loss. Equal to the value of the denomination per piece in addition to the loss. |
| ii. | Counterfeit notes detected in soiled note remittances and currency chest balances. | Penalty shall be levied in terms of the instructions issued by DCM (FNVD) No.G-1/16.01.05/2023-24 dated April 03, 2023 |
| iii. | Mutilated notes (including deliberately cut notes and built-up notes) detected in soiled note remittances and currency chest balances | ₹50/- per piece irrespective of the denomination in addition to the loss.
The recovery of loss and imposition of penalty shall be done immediately on detection, irrespective of number of pieces. |
| iv. | Non-compliance with operational guidelines by currency chests detected by RBI officials e.g.
| Penalty of ₹5,000 for each instance of irregularity.
Penalty shall be enhanced to ₹10,000 in case of repetition / recurrence of irregularity during a financial year. Penalty shall be levied immediately. |
| v. | Violation of any of the terms of agreement with RBI (for opening and maintaining currency chests) or deficiency in service in providing exchange facilities, as detected by RBI officials e.g.
| ₹10,000 for any violation of agreement or deficiency of service.
₹5 lakh in case there are more than 5 instances of violation of agreement/deficiency in service by the branch, during a financial year. The levy of such penalty shall be placed in public domain. Penalty shall be levied immediately. |
| vi | Non-replenishment of ATMs | Penalty shall be levied in terms of provisions of circular DCM(RMMT) No. S153/11.01.01/2021-22 dated August 10, 2021 and instructions issued subsequently. |
3.1 Competent Authority The Competent Authority to decide the nature of irregularity shall be the Officer-in-Charge of the Issue Department of the Regional Office under whose jurisdiction the defaulting currency chest/bank branch is located.
3.2 Appellate Authority
