DCM(CC)No G-8 /03.28.01/2005-06.
August 02, 2005
The Chairman & Managing Director/ Chief Executive Officer
(All banks having currency chests)
Shortages in currency chests - Strengthening
of internal control systems in banks maintaining currency chests.
Please refer to our circular DCM(CC)No.485/03.30.02/2003-04
dated October 23, 2003. We observe from the records that the shortages in the
remittances sent by currency chests of various banks to Reserve Bank of India
have been showing an increasing trend. One of the reasons for such shortages
and even for frauds/misappropriation is the inability of the Controlling Offices
of the banks to ensure periodical verification in time of the chest balances
and/or at least once in two months as prescribed in our circular referred to
above. Further, internal quantitative/qualitative checks exercised in the currency
chests are insufficient, and which contribute to increasing incidents of shortages
and misappropriation, besides increasing risk. We shall, therefore, be glad
if you will please issue necessary instructions to the Controlling Offices of
your chest branches for ensuring verification of balances as per the minimum
periodicity stipulated in our circular and essential safeguards in internal
control system (such as surprise verification/effective joint custody, etc.)
are invariably adhered to.
2. Please acknowledge receipt.
(P R Nair)