RBI issued the Master Direction – Scheme of Penalties for bank branches and currency chests for deficiency in rendering customer service to the members of public
The following has been stated
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 and enhancing the operational efficiency of currency management. In order to ensure that 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.
The Scheme of Penalties for bank branches and currency chests has been formulated to ensure that all bank branches / currency chests provide customer service to the members of public / linked bank branches keeping in view the objectives of Clean Note Policy and enhancing operational efficiency.
| Sr. No. | Nature of Irregularity | Penalty |
| i. | Shortages of notes in Soiled Note Remittances (SNRs) and shortages of notes and coins in currency chest balances | For notes in denomination up to ₹50/- ₹50/- per piece in addition to the loss. For notes in denomination of ₹100/- & above Equal to the value of the denomination per piece in addition to the loss. For coins in all denominations Equal to the value of the denomination per piece in addition to the loss. The recovery of loss and levy of penalty shall be done immediately on detection of shortage, irrespective of number of pieces. |
| ii. | Counterfeit notes detected in soiled note remittances and currency chest balances | Banknotes tendered over the counter shall be examined for authenticity through machines. Similarly, banknotes received directly at the back office / currency chest through bulk tenders shall also be examined through machines. Failure of the banks to impound counterfeit notes detected at their end will be construed as wilful involvement of the bank concerned in circulating counterfeit notes and penalty will be levied. Penalty shall be levied in terms of the instructions issued by DCM (FNVD) No.G-4/16.01.05/2025-26 dated April 1, 2025 |
| 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 levy 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. a) Non-functioning of CCTV, non-compliance with rules / guidelines pertaining to CCTV recording preservation period, and related issues b) Branch cash / documents kept in strong room (CC’s vault) c) Non-utilisation of Note Sorting Machines (NSMs) for sorting of notes (NSMs not used for sorting of high denomination notes, i.e. notes of denomination ₹100 and above, received over the counter or not used for sorting notes remitted to chest / RBI), Non-updation of NSMs as per prescribed standards, non-functional NSMs etc. d) Non-conduct of surprise verification of currency chest balances – at (i) bimonthly intervals by officials unconnected with the operations of currency chest, and (ii) six-monthly intervals by officials from the Controlling Office | Penalty of ₹5,000/- for each instance of irregularity. Penalty shall be enhanced to ₹10,000/- in case of repetition / recurrence of irregularity in consecutive inspection cycles or earlier. 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. a) Non-issue of coins over the counter to any member of public despite having stock. b) Refusal by any bank branch1 to exchange soiled/ mutilated/ imperfect notes tendered by any member of public. c) Denial of facilities / services to linked branches / of other banks. d) Non acceptance of lower denomination notes (i.e. denomination of ₹50 and below) tendered by members of public and linked bank branches for exchange / deposit. e) Detection by RBI of mutilated, built up, counterfeit notes in re-issuable packets prepared by the currency chest branches. | ₹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 currency chest / branch in consecutive inspection cycles or earlier. The levy of such penalty shall be placed in public domain. Penalty shall be levied immediately. |
| vi | Non-replenishment of ATMs | The Scheme of Penalty for non-replenishment of ATMs has been formulated to ensure that sufficient cash is available to public through 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. |
Link – https://www.rbi.org.in/Scripts/NotificationUser.aspx?Id=12810&Mode=0
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