RBI/DCM/2026-27/395
DCM (NE) No.G-2/08.07.18/2026-27 April 01, 2026 The Chairman/ Managing Director/ Chief Executive Officer All Banks Madam/ Dear Sir, Master Direction – Facility for Exchange of Notes and Coins In exercise of the powers conferred under Section 35A of the Banking Regulation Act, 1949, read with sections 28, 38, 39, 58(1) and 58(2)(q) of the Reserve Bank of India Act, 1934, Reserve Bank of India (RBI), from time-to-time issues guidelines/ instructions/ directives to the banks on provision of Facility for Exchange of Notes and Coins to members of public. 2. A Master Direction incorporating and updating the extant guidelines/ instructions/ directives on Facility for Exchange of Notes and Coins has been prepared to enable banks to have all current instructions on the subject at one place for reference and the same is enclosed. 3. The circulars listed in Annex II and all Master Circulars/ Directions earlier issued on the subject stand withdrawn from the date of issuance of this Master Direction. Yours faithfully, (Suman Nath)
Chief General Manager Encl: As above
Master Direction – Facility for Exchange of Notes and Coins Index Master Direction – Facility for Exchange of Notes and Coins In exercise of the powers conferred under Section 35A of the Banking Regulation Act, 1949, read with sections 28, 38, 39, 58(1) and 58(2)(q) of the Reserve Bank of India Act, 1934, the Reserve Bank of India being satisfied that it is necessary and expedient in the public interest to do so, hereby, issues the Directions hereinafter specified. 1.Facility for Exchange of Notes and Coins at Bank Branches 1.1 All bank branches in all parts of the country are mandated to provide following customer services, more actively and vigorously to the members of public so that there is no need for them to approach RBI Regional Offices for this purpose: 1.1.1 Issuing fresh/ good quality notes and coins of all denominations, 1.1.2 Exchanging soiled/ mutilated/ imperfect notes, and 1.1.3 Accepting coins and notes either for transactions or exchange. 1.2 Since issuance of banknotes is facilitated through ATMs on a large scale, banks/ White Label ATM Operators (WLAOs) shall strengthen their systems/ mechanisms to monitor availability of cash in ATMs and ensure timely replenishment to prevent cash-outs and thereby avoid inconvenience to members of the public. 1.3 Banks shall ensure that all their branches provide facility for exchange of notes and coins not only to their customers but also others. Small Finance Banks (up to two years from the commencement of their banking business) and Payment Banks may exchange mutilated and imperfect notes at their option. 1.4 Considering that handling coins packed in sachets of 100 pieces each or small value-based sachets would be more convenient for the cashiers as well as the customers, such sachets shall be kept at the counters and made available to the customers. 1.5 None of the bank branches shall refuse to accept coins and/ or small denomination notes tendered at their counters. All coins in the denomination of 50 paise, ₹1, ₹2, ₹5, ₹10 and ₹20 of various sizes, theme and design issued from time to time by the Government of India continue to be legal tender. 1.6 Uncurrent Coins - The coins of 25 paise and below, issued from time to time have ceased to be legal tender with effect from June 30, 2011 in terms of Gazette Notification No.2978 dated December 20, 2010 issued by the Government of India. 1.7 All branches shall provide the above facilities to members of public without any discrimination on all working days. 1.8 The availability of the above-mentioned facilities at the bank branches shall be given wide publicity for information of the public at large. 1.9 Banks may enhance the engagement of their Business Correspondents (BCs) and may also engage Cash in Transit (CIT) entities for distribution of banknotes and coins to address the last mile connectivity issues. 1.10 Banknotes tendered over the counter of a bank branch shall be examined for authenticity through machines before providing exchange or credit. When a banknote tendered at the counter is found to be counterfeit, under no circumstance it shall be returned to the tenderer or destroyed and action should be taken as prescribed in the Master Direction on Counterfeit Notes-Detection, Reporting and Monitoring. 2. Reserve Bank of India (Note Refund) Rules, 2009 [as Amended by Reserve Bank of India (Note Refund) Amendment Rules, 2018] - Delegation of Powers 2.1 In terms of Section 28 read with Section 58 (2) of Reserve Bank of India Act, 1934, no person is entitled as a right to recover from the Government of India or RBI the value of any lost, stolen, mutilated or imperfect currency note of the GOI or banknote. However, with a view to mitigating hardship to the public in genuine cases, it has been provided that the RBI may, with prior sanction of the Central Government, prescribe the circumstances in, and the conditions and limitations subject to which, the value of such currency notes or banknotes may be refunded as a matter of grace. 2.2 The Note Refund Rules, 2009 were amended vide Reserve Bank of India (Note Refund) Amendment Rules, 2018 notified in the Gazette of India on September 6, 2018 to enable the public to exchange mutilated notes in Mahatma Gandhi (New) series, which are smaller in size as compared to the banknotes of earlier series. The minimum area of the single largest undivided piece of the note required for payment of full value for notes of ₹50 and above denominations were also revised. 2.3 With a view to extending the facility for the benefit and convenience of public, all bank branches have been delegated powers under Rule 2(j) of Reserve Bank of India (Note Refund) Rules, 2009 [as amended by Reserve Bank of India (Note Refund) Amendment Rules, 2018] (hereinafter referred to as NRR, 2009 (as amended in 2018) for exchange of mutilated/ imperfect notes, free of cost. 3. Soiled Note In order to facilitate quicker exchange facilities, the definition of soiled note has been expanded. A ‘soiled note’ means a note which has become dirty due to normal wear and tear and also includes a two-piece note pasted together wherein both the pieces presented belong to the same note and form the entire note with no essential feature missing. These notes shall be accepted over bank counters for exchange or credit to accounts of the public maintained with banks or in payment of Government dues. However, in no case, these notes shall be issued to the public as re-issuable notes, and such notes shall be deposited in Currency Chests (CCs) for onward transmission to RBI offices as soiled note remittances for further processing. 4. Mutilated and Imperfect Notes – Presentation and Passing 4.1 Mutilated notes A mutilated note is a note of which a portion is missing or which is composed of more than two pieces. Mutilated notes may be presented at any of the bank branches. The notes so presented shall be accepted, exchanged and adjudicated in accordance with NRR, 2009 (as amended in 2018). The branches shall take steps to ensure that the exchange facilities are not cornered by private money changers or professional dealers of defective notes. 4.2 Imperfect Notes Imperfect note means any note, which is wholly or partially, obliterated, shrunk, washed, altered or indecipherable but does not include a mutilated note. Imperfect notes which can withstand normal handling may be presented at any of the bank branches for exchange. The notes so presented shall be accepted, exchanged and adjudicated in accordance with NRR, 2009 (as amended in 2018). 5. Notes which cannot withstand Normal Handling Notes which have turned extremely brittle, charred or inseparably stuck up together and, therefore, cannot withstand normal handling, shall not be accepted by the bank branches for exchange. Instead, the holders shall be advised to tender these notes to the Issue Office1 of Reserve Bank of India, where they will be adjudicated under a Special Procedure. Tenderer shall also be informed that such notes can also be sent to the Issue Office of Reserve Bank of India through Insured Post/ Registered Parcel giving his/ her bank account details (a/c no, branch name, IFSC, etc.) for credit of the adjudicated value to their bank account. 6. Procedure for Exchange of Soiled/ Mutilated/ Imperfect Notes 6.1 Exchange of Soiled Notes 6.1.1 Notes presented in small number: Where the number of notes presented by a person is up to 20 pieces with a maximum value of ₹5,000 per day, banks shall exchange them over the counter, free of charge. 6.1.2 Notes presented in bulk: Where the number of notes presented by a person exceeds 20 pieces or ₹5,000 in value per day, banks shall accept them against receipt, for value to be credited later. The probable date of payment shall be informed to the tenderers on the receipt itself and the same shall not exceed 7 days. Bank account details shall be obtained from the tenderers for crediting the exchange value by electronic means. Banks may levy reasonable service charges as permitted in Reserve Bank of India (Responsible Business Conduct) Directions, 20252. 6.2 Exchange of Mutilated and Imperfect Notes 6.2.1 All bank branches shall exchange mutilated and imperfect notes and issue receipt for the notes presented for adjudication as per procedure laid down in Part III of NRR, 2009 (as amended in 2018) and follow the guidelines mentioned in the following paragraphs, 6.2.2, 6.2.3 and 6.2.4 of this Master Direction, for notes presented in small numbers and in bulk respectively. 6.2.2 Notes presented in small number: Where the number of notes presented by a person is up to 10 pieces, bank branches shall normally adjudicate the notes as per the procedure laid down in Part III of NRR, 2009 (as amended in 2018) and pay the exchange value over the counter. 6.2.3 Notes presented in bulk: Where the number of notes presented by a person exceeds 10 pieces or ₹5,000 in value per day, bank branches shall accept them against receipt, for value to be credited later. 6.2.4 If the non-CC branches are not able to adjudicate the mutilated notes, the notes shall be received against a receipt and sent to the linked CC branch for adjudication. The probable date of payment shall be informed to the tenderers on the receipt itself and the same shall not exceed 30 calendar days. Bank account details shall be obtained from the tenderers for crediting the exchange value by electronic means. 6.3 In case value of soiled/ mutilated/ imperfect notes tendered for exchange is above ₹50,000, banks are expected to take the usual precautions. 7. Provision of Note Counting Machines on the Counters The banks shall provide note counting machines/ dual display note counting machines at the payment counters to enable the customers to satisfy themselves about the numerical accuracy of the note issued. 8. Distribution of coins 8.1 In order to meet the coin requirements of bulk customers (requirement of more than 1 bag in a single transaction) banks may provide coins to such customers purely for business transactions. The banks may also endeavor to provide such services as part of their Board approved policy on ‘Door-Step Banking’ services. Banks may ascertain that such customers are KYC compliant constituents of the bank and the record of coins thus supplied may be maintained. Banks may also exercise due diligence to ensure that such facility is not misused. Disbursement of coins to retail customers through counters of bank branches shall continue. 8.2 To ensure steady supply of coins to bulk customers and BCs for onward distribution, all banks may ensure that each of their branches maintain a minimum stock of one bag of coins in each denomination. 9. Grievance Redressal In case of grievance of a tenderer against a specific bank, a complaint may be lodged with the bank branch concerned. If the bank does not respond within a period of 30 days after lodging of the complaint or rejects the complaint wholly/ partly or if the complainant is not satisfied with the response/ resolution given by the bank branch, complaint can be lodged with the Ombudsman, under 'The Reserve Bank - Integrated Ombudsman Scheme, 2021'. Complaints can be filed online on https://cms.rbi.org.in and also through the dedicated e-mail or sent in physical mode to the 'Centralised Receipt and Processing Centre' set up at Reserve Bank of India, 4th Floor, Sector 17, Chandigarh - 160 017 with the bank/ postal receipts as proof for necessary action. 10. Treatment of Mutilated/ Imperfect Notes 10.1 Notes Bearing 'PAY'/ 'PAID'/ 'REJECT' Stamps 10.1.1 Every Officer-in-charge of the branch i.e. the Branch Manager and every Officer-in-charge of the Accounts or Cash Wing of the Branch shall act as 'Prescribed Officer' in each branch to adjudicate the notes received at the branch for exchange in accordance with NRR, 2009 (as amended in 2018). After adjudicating mutilated notes, the Prescribed Officer is required to record her/ his order by subscribing her/ his initials to the dated 'PAY'/ 'PAID'/ 'REJECT' stamp. These stamps shall also carry the name of the bank and branch concerned and such stamps shall be held under the custody of the 'Prescribed Officer' to avoid misuse. 10.1.2 Mutilated/ imperfect notes bearing 'PAY'/ 'PAID' /'REJECT' stamp of any RBI Issue Office or any bank branch, if presented for payment again at any of the bank branches shall be rejected under Rule 6(2) of NRR, 2009 (as amended in 2018) and the tenderer shall be advised that the value of such note/s cannot be paid since the same has already been paid as is evident from the stamp/s affixed on it/ them. All bank branches are instructed to not issue the notes bearing PAY/ PAID/ REJECT stamps to the public even through oversight. The branches shall caution their customers not to accept such notes from any bank or anybody else. 10.2. Notes with Slogans/ Scribbling/ Stain etc. 10.2.1 Banks shall desist from writing anything whatsoever on any part of the banknote. Further, they may also endeavour to educate their staff, customers and members of public, in this regard. 10.2.2 Notes with slogans, political or religious messages, scribbling, stain (including colour/ oil stain), stapling etc. are unfit for usage and circulation and go against Clean Note Policy of RBI. 10.2.3 Such notes received from members of public shall not be reissued for circulation and be remitted to CC for onward remittance to RBI Offices. 10.2.4 Any note with slogans and message of a political or religious nature written across it ceases to be a legal tender and the claim on such a note will be rejected under Rule 6(3) (iii) of NRR, 2009 (as amended in 2018). Similarly, notes which are defaced may also be rejected under Rule 6(3) (ii) of the said Rules. 10.2.5 All Bank notes with scribbling/ stain (including colour/ oil stain) on them continue to be legal tender. Such notes can be deposited or exchanged in any bank branch. 10.3. Deliberately Cut Notes The notes which are found to be deliberately cut, torn, altered or tampered with, if presented for payment of exchange value shall be rejected under Rule 6(3) (ii) of the NRR, 2009 (as amended in 2018). Although it is not possible to precisely define deliberately cut notes, a close look at such notes will clearly reveal any deliberate fraudulent intention, as the manner in which such notes are mutilated will follow a broad uniformity in the shape/ location of missing portions of the notes, especially when the notes are tendered in large numbers. The details of such instances together with the name of the tenderer, the number of notes tendered and their denominations, shall be reported to the DGM/ GM, Issue Department, Reserve Bank of India under whose jurisdiction the branch falls. The matter shall also be reported to local police in case a large number of such notes are tendered. 11. Disposal of Notes Adjudicated at Bank Branches 11.1 Regarding the notes adjudicated by bank branches, the full value paid notes shall be remitted by all branches to the CC branches with which they have been linked to. Further, these notes may be packed in separate packets/ boxes by the CC branches and sent to the RBI Issue Offices along with soiled notes remittance. 11.2 The half value paid notes and rejected notes, which are held by the CC branches in their cash balance, shall be packed separately with separate invoice and sent along with the full value paid notes as part of soiled remittance or they may be sent by registered and insured post as and when required i.e. the half value paid notes and rejected notes may be sent to the RBI Issue Offices periodically and not necessarily with the soiled note remittance. 11.3 The branches other than the CC branches shall pack the half value/ reject notes separately along with a separate invoice and send them to their linked CC branches or to Issue Office (RBI) concerned by registered and insured post as and when required. 11.4 The full value paid notes will be treated as chest remittance by the RBI Issue Office while the half value paid notes and rejected notes will be treated as notes tendered for adjudication and processed accordingly. 11.5 All CC branches are required to submit to our RBI Issue Offices a quarterly statement showing the number of notes adjudicated during the quarter as given in the Annex I. 12. Training RBI Issue Offices conduct training programmes for 'Prescribed Officers' of bank branches on a periodic basis. As the training programmes are intended to provide knowledge and instil confidence in the Prescribed Officers in the process of adjudication of defective notes, it is imperative that the Prescribed Officers of the branches are deputed for such programmes. 13. Display of Notice Board All bank branches are required to display at their branch premises, at a prominent place, a board indicating the availability of note and coin exchange facility with the legend, "SOILED/ MUTILATED NOTES AND COINS ARE ACCEPTED AND EXCHANGED HERE" for information of general public. 14. Monitoring and Control 14.1 The Senior Officers/ Zonal Managers/ Regional Managers of banks shall pay surprise visits to the branches/ CCs, record the position of compliance to the above measures in their visit reports and ensure prompt remedial action, wherever necessary. 14.2 Non-compliance with any provision of this Master Direction shall be viewed as violation of instructions issued by the Reserve Bank of India and penalty, as applicable in terms of Master Direction on Incentives for Currency Distribution and Exchange and Penalties/ Penal Provisions for Bank Branches and Currency Chests for Deficiency in Rendering Customer Service and Reporting of Transactions/ Balances, shall be imposed.
Annex II List of Circulars/ Master Directions/ Master Circulars withdrawn | Sr. No. | Circular/ Notification No. | Date | Subject | | 1. | DCM(NE)No. G-5/08.07.18/2025-26 | 01.04.2025 | Master Direction on Facilities for Exchange of Notes and Coins (including earlier Master Directions/ Master Circulars on the subject) | | 2. | DCM (CC) No.97527/03.41.01/2021-22 | 27.08.2021 | Review of incentive and other measures to enhance distribution of coins | | 3. | DCM (RMMT) No.S153/11.01.01/2021-22 | 10.08.2021 | Monitoring of Availability of Cash in ATMs | | 4. | DCM (NE) No.3057/08.07.18/2018-19 | 26.06.2019 | Acceptance of coins | | 5. | DCM (NE) No.657/08.07.18/2018-19 | 07.09.2018 | Amendments to Reserve Bank of India (Note Refund) Rules, 2009 | | 6. | RBI/2017-18/132 DCM (RMMT) No.2945/11.37.01/2017-18 | 15.02.2018 | Acceptance of coins | | 7. | DCM(NE)No.120/08.07.18/2016-17 | 14.07.2016 | Facility for Exchange of Soiled/ Mutilated/ Imperfect Notes | | 8. | DCM(NE)No.3498/08.07.18/2012-13 | 28.01.2013 | Facility for exchange of notes and coins | | 9. | DCM (Plg) No. G - 14/10.65.03/2013-14 | 10.10.2013 | Monetary Policy Statement for 2013-14- Distribution of Banknotes and Coins- Alternate Avenues | | 10. | DCM (Plg) No.G12/10.65.03/2013-14 | 10.09.2013 | Monetary Policy Statement for 2013-14- Distribution of Banknotes and Coins- Alternate Avenues | | 11. | DCM (Plg).No.6983/10.03.03/2010-11 | 28.6.2011 | Call in from circulation coins of the denomination of 25 paise and below | | 12. | DCM (Plg).No.6476/10.03.03/2010-11 | 31.5.2011 | Call in from circulation coins of the denomination of 25 paise and below-complaints reading non-acceptance of | | 13. | DCM (Plg).No.4459/10.03.03/2010-11 | 09.2.2011 | Call in from circulation coins of the denomination of 25 paise and below | | 14. | DCM (Plg).No.4137/10.03.03/2010-11 | 25.1.2011 | Call in from circulation coins of the denomination of 25 paise and below | | 15. | DCM(RMMT)No.1277/11.36.03/2010-11 | 24.8.2010 | Exchange Facilities by Currency Chest branches/ scheme for providing facilities | | 16. | DCM(NE)No.1612/08.01.01/2009-10 | 13.9.2009 | Notification of Note Refund (Rules), 2009 | | 17. | RBI/2006-07/349/DCM (NE)No.7488/08.07.18/2006-07 | 25.4.2007 | Acceptance of Small Denomination Notes and Coins | | 18. | DCM(RMMT)No.1181/11.37.01/2003-04 | 05.4.2004 | Acceptance of coins | | 19. | DCM (Plg)No.874/10.36.00/2003-04 | 29.1.2004 | Provision of Note Counting Machines in the Counter | | 20. | DCM(NE)No.310/08.07.18/2003-04 | 19.1.2004 | Providing facilities to public for exchange of notes, coins, etc. | | 21. | DCM(RMMT)No.404/11.37.01/2003-04 | 09.10.2003 | Acceptance of coins and availability of notes | | 22. | G-11/08.07.18/2001-02 | 02.11.2001 | Reserve Bank of India (Note Refund) Rules, 1975 – Delegation of note exchange powers to currency chest branches of Public/ Private Sector Banks | | 23. | Cy.No.386/08.07.13/2000-2001 | 16.11.2000 | Reserve Bank of India (Note Refund) Rules, 1975 – Delegation of full note exchange powers to currency chest branches of Public/ Private Sector Banks. | | 24. | G-67/08.07.18/96-97 | 18.2.1997 | RBI (Note Refund) Rules, 1975, Delegation of full powers to private sector banks maintaining currency chests | | 25. | G-52/08.07.18/96-97 | 11.1.1997 | RBI (NR) Rules Scheme of delegation of powers to PSBs for exchange of defective notes – Disposal of notes bearing PAY/ PAID stamp | | 26. | G-24/08.01.01/96-97 | 03.12.1996 | Acceptance of Exchange of Cut Notes – Liberalization | | 27. | G-64/08.07.18/95-96 | 18.5.1996 | RBI (NR) Rules – Delegation of full powers to branches PSBs and publicity for exchange of defective notes | | 28. | G-71/08.07.18/92-93 | 22.6.1993 | RBI (NR) Rules – Scheme of delegation of full powers for exchange of defective notes to the branches of PSBs – Publicity | | 29. | G-83/CL-1(PSB)-91/92 | 06.5.1992 | RBI(NR) Rules – Delegation of powers to chest branches of PSBs | | 30. | G-74/CL-(PSB)(Gen)-90/91 | 05.6.1991 | RBI(NR) Rules – Delegation of full powers there under to PSBs | | 31. | 5.5/CL-1(PSB)-90/91 | 25.9.1990 | RBI(NR) Rules – Scheme of delegation of full powers to PSBs | | 32. | 8/CL-1(PSB)-90/91 | 17.8.1990 | RBI(NR) Rules – Scheme of delegation of full powers to PSBs | | 33. | G-123/CL-1(PSB)(Gen)-89/90 | 07.5.1990 | RBI (NR) Rules – Scheme of delegation of full powers to PSBs (Amendment) | | 34. | G-108/CL-1(PSB)(Gen)-89/90 | 03.4.1990 | RBI(NR) Rules 1989 – Bank notes of Rs.500/- denomination – Exchange of defective notes at branches of PSBs | | 35. | G-8/CL-1(PSB)-89/90 | 12.7.1989 | RBI (NR) Rules – Defective notes branded with 'To Claims' stamp of RBI Issue Offices | | 36. | G.84/CL.1(PSB)-88/89 | 17.3.1989 | RBI(NR) Rules – Delegation of full note exchange powers to PSBs | | 37. | G.66/CL.1(PSB)-88/89 | 09.2.1989 | RBI (NR) Rules – Delegation of powers to PSBs – Training | | 38. | S.12/CL-1(PSB)-88/89 | 30.9.1988 | RBI (NR) Rules – Deliberately mutilated notes – Adjudication | | 39. | G.134/CL-1(PSB)-87/89 | 25.5.1988 | Implementation of the Scheme of delegation of full powers under RBI (NR) Rules | | 40. | 192/CL-1-(PSB)-86/87 | 02.6.1987 | RBI(NR) Rules – Scheme of delegation of full powers to PSBs | | 41. | 189/CL.2/86/87 | 02.6.1987 | Defacing currency notes by writing on them or inscribing messages, slogans etc. thereon | | 42. | 185/CL-1(PSB)-86/87 | 20.5.1987 | RBI (NR) Rules – Affixing of 'PAY' and 'REJECT' stamps on defective notes | | 43. | 173/CL.1/84/85 | 02.4.1985 | Delegation of full powers to PSBs for exchange of defective notes/ procedures of the same | | 44. | Cy.No.1064/CL.1/76/77 | 09.8.1976 | Facilities to the public for exchange of soiled notes and slightly mutilated notes |
|