The Chairman & Managing Directors
All Public Sector and Private Sector Banks
Master Circular - Facility for Exchange of Notes and Coins
As you are
aware, the Reserve Bank of India has, from time to time, issued a number of circulars
containing instructions to banks on note exchange facility to be provided to the
members of public. In order to enable the banks to have all the instructions at
one place, it has been decided to consolidate the same. Accordingly, we enclose
a Master Circular prepared on the subject for your information and taking appropriate
action, where required.
N. Krishna Mohan)
Bank of India (Note Refund) Rules - Delegation of full powers
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 bank note. However, with a view to mitigating the hardship to the public in
genuine cases, it has been provided that the RBI may, with the previous sanction
of the Central Government, prescribe the circumstances in, and the conditions
and limitations subject to which, the value of such currency notes or bank notes
may be refunded as a matter of grace.
a view to extending the facility for the benefit and convenience of public, all
currency chest branches have been delegated powers under Reserve Bank of India
(Note Refund) Rules for exchange of torn/mutilated/ defective notes.
order to facilitate quicker exchange facilities, the following types of soiled
and cut notes should be freely exchanged by all bank branches including non-chest
branches. They should also be accepted over bank counters in payment of Government
dues and for credit of accounts of the public maintained with banks.
Single numbered notes - Re.1/-, Rs.2/- & Rs.5/-
presented should not be more than two pieces. No essential feature of the note
should be missing and complete number should be available in an undivided area
on one of the pieces.
Double numbered notes - Rs.10/-,Rs.20/-
Rs.50/-, Rs.100/-,Rs.500/- & Rs.1000/-
note presented should not be more than two pieces. No essential feature of the
note should be missing. Both the pieces should be of the same note i.e. the complete
number in an undivided area on each piece should be the same.
above types of notes will be treated as soiled notes and be packeted alongwith
soiled notes. These unfit notes shall, in no case, be issued to the public as
reissuable notes but shall be deposited in currency chests for onward transmission
to RBI offices as chest remittances.
which have turned extremely brittle or badly burnt, charred or inseparably stuck
up together and, therefore, cannot withstand normal handling, shall not be accepted
by the branches for exchange. Instead, the holders may be advised to tender these
notes to the concerned Issue Offices where they will be adjudicated under a Special
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 the RBI (NR) Rules 1975 (as amended upto 1980). After adjudicating mutilated
notes, the Prescribed Officer is required to record his order by subscribing his
initials to the dated 'PAY'/ 'PAID'/ 'REJECT' stamp. The 'PAY' & 'REJECT' stamps
should also carry the name of the bank and branch concerned. Defective notes bearing
'PAY'/'PAID' (or 'REJECT') stamp of any RBI Issue Office or any bank branch, if
presented for payment again at any of the designated bank branches should be rejected
under Rule 5(1) of RBI (NR) Rules and the tenderer should be advised that the
value of such (defective) note/s cannot be paid since the same has already been
paid as is evident from the PAY/PAID stamps affixed on it/them. All bank branches
have instructions not to issue notes bearing PAY/PAID stamps to the public even
branches should caution their customers not to accept such notes from any bank
or anybody else. [Ref. Memorandum of Procedure to be followed by Public Sector
Banks and Circulars DCM.No.185/CL.1(PSB)-86/87 dated 20.5.87 and No.52/08.07.18/
96-97 dated 11.1.97]
Any note with slogans and message of a political nature written across it ceases
to be a legal tender and the claim on such a note will be rejected under Rule
5(2) of RBI (NR) Rules. Similarly notes which are disfigured may also be rejected
under Rule 5(2) of RBI (NR)Rules. [Ref.DCM Cir.No.189/CL.2-86/87 dated 2.6.87]
The notes, which are found to be deliberately cut or tampered with, if presented
for payment of exchange value should be rejected under Rule 5(2)(ii) of the RBI
(NR) Rules. Although it is not possible to precisely define deliberately cut/mutilated
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 number. The details of the case such as the
name of the tenderer, the number of notes tendered and their denominations should
be reported thereafter to the Deputy/General Manager, Issue Department, under
whose jurisdiction the branch falls. The matter should also be reported to local
police in case a large number of such notes are tendered. The branches should
ensure that the note exchange facility is not cornered by private money changers/professional
dealers in defective notes. [Ref.Cir.No.S-12/CL.1(PSB)-88/89 dated 30.9.88 and
No.8/ CL.1(PSB)-90/91 dated 17.8.90]
Our Issue Offices have instructions to conduct training programmes for 'Prescribed
Officers' of currency chest branches on a priority basis. It should be ensured
that only officers who are designated as 'Prescribed Officers' are deputed for
training. 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 concerned branches
do attend the programmes. [Ref.Cir.No.220/CL1(PSB)-85/86 dated 31.5.86]
All designated bank branches are required to display at their branch premises,
at a prominent place, a board indicating the availability of note exchange facility
with the legend, "Mutilated notes are Accepted & Exchanged Here". Banks should
ensure that all their branches undertake note exchange business. [Ref.Cir.No.G-71/08.07.18/92-93
With the introduction of bank notes of Rs.1000/- denomination, the word 'five
hundred rupees' wherever appearing in the Note Refund Rules has been substituted
with the word 'one thousand rupees' and the number '1000' has been added after
the number '500'. The effect of the above instruction is that the rules, which
are applicable to exchange of double numbered notes upto Rs.500/- denomination,
are now applicable to exchange of notes of Rs.1000/- denomination also.
the notes of Rs.1000/- denomination will be adjudicated under RBI (NR) Rules in
the same way as notes of Rs.10/-, Rs.20/-, Rs.50/-, Rs.100/- and Rs.500/- are
Release dated 6.10.2000]
The notes paid by the non-currency chest branches may get such notes exchanged
from the nearest RBI Issue office or currency chest. The currency chest branch
may deposit into the currency chest the notes paid for full value by it or such
full value paid notes accepted by it from non-chest branches. These notes should
however be kept distinctly separate and not mixed with other soiled notes. If
note bearing PAY/PAID stamp are found mixed up in soiled note packets during the
course of examination of chest remittances received in our Issue Offices, the
same shall be returned to the chest representatives/remitted to chest branch at
cost after treating it as deficiency which will be recovered by debiting the amount
thereof to the account of the concerned bank maintained with our offices.
dated 12.1.88 and G.74/CL. (PSB)Gen-90/91 dated 5.6.91]
Regarding audit of the adjudicated notes at the currency chests under the jurisdiction
of the Issue Offices, the full value paid notes have to be remitted by currency
chest branches to the Issue Office together with the next soiled note remittance
in the manner as already laid down. The half value paid notes and rejected notes,
which are held by the currency chest maintaining branch in its cash balance, may
either be remitted separately packed together with the full value paid notes or
sent by registered and insured post as and when required. While the full value
paid notes would be treated as a chest remittance and accounted for in the Invoiced
Notes Account as at present, the half value paid notes and rejected notes shall
be treated and accounted for as receipt in the Claims Section and processed accordingly.
Extract of the instructions, inter alia, on audit of mutilated notes contained
in Circular DCM (CC) No. G-40/03.30.01/2003-04 dated June 9, 2004 issued to RBI
Issue Offices which is applicable to the currency chest holding branches.]
All branches of currency chest maintaining banks in all parts of the country should
provide the following customer services, more actively and vigorously to the members
of public so that there is no need for them to approach the RBI Regional Offices
only for this purpose:
meeting the demands for fresh / good quality notes and coins of all denominations,
(b) exchanging soiled notes, (c) adjudicating mutilated notes, and (d) accepting
coins and notes either for transactions or exchange.
of such facilities at the branches should be publicised for information of the
public at large.
(NE) No. 310/08.07.18/2003-04 dated 19.01.2004]
The agreement between Reserve Bank of India and the commercial banks for establishment
of currency chests/and/or Small Coin Depots provides that the bank branches would
accept coins in exchange of notes. The banks are requested to instruct their branches
should accept coins of all denominations from any member of public without any
restriction and pay the value in notes.
should use counting machines or accept coins by weight for large receipts, as
coins accepted can be held as part of chest balance and small coins as part of
the Small Coin Depot balance.
coins of 5,10 and 20 paise denominations may be periodically sent by the Small
Coin Depot branches to the India Government Mints at Hyderabad, Kolkata and Mumbai
in accordance with the existing prescribed procedure.
(RMMT) No. 404/11.37.01/2003-04 dated 9.10.2003]
The banks are required to direct all their branches to accept coins of all denominations
tendered at their counters either for exchange or for deposit in accounts. Such
coins, particularly lower denominations, may be preferably accepted by weighment.
However, as accepting coins packed in polythene sachets of 100 each would be more
convenient for the cashiers as well as the customers, the banks may keep such
sachets at the counters and make them available to the customers. A notice to
this effect may be displayed suitably inside as also outside the branch premises
for information of the public. Considering that aluminium coins of 5 paise, 10
paise, 20 paise, aluminium-bronze coins of 10 paise, stainless steel coins of
10 paise, cupronickel coins of 25 paise, 50 paise and rupee one denominations
are being withdrawn and remitted to the mints, customers may be requested, and
not insisted, by the banks to pack each of these denominations separately and
also metal-wise with 100 coins in each sachet before they are tendered at the
counters. Similar arrangements may also be made for acceptance of current coins
of 25 paise, 50 paise and one rupee of stainless steel and two rupees and five
rupees coins of cupronickel. In case of large variations of weight, counting machines
may be used.
to obviate the problem of storage of coins at the branches, aluminium coins of
5 paise, 10 paise, 20 paise, aluminium-bronze coins of 10 paise, stainless steel
coins of 10 paise and cupronickel coins of 25 paise, 50 paise and Re. 1 may be
remitted to Government of India Mints at Mumbai/Kolkata/Hyderabad with prior intimation
to them through the currency chest and small coin depot branches of your bank
(or link currency chest and small coin depot branches of other banks) as per the
existing procedure. Stainless steel coins of 25 paise, 50 paise and Re. 1 and
cupronickel coins of Rs. 2 and Rs. 5 denominations should, however, be put back
in circulation. In case, the stocks of these coins reach beyond the holding capacity
of the currency chest / small coin depot for lack of demand, the Issue Department
of the Circle should be approached for remittance of coins.
Regional Managers / Zonal Managers of the banks may pay surprise visits to the
branches and report the position of compliance in this regard to the Head Office
which will review such reports and take prompt remedial action, wherever necessary.
Any non-compliance in
this regard shall be viewed as violation of instructions issued by the Reserve
Bank of India.
(RMMT) No. 1181/11.37.01/2003-04 dated 05.04.2004]NOTE
: List of circulars consolidated by this Master Circular is given in Annexure
Subject : Reserve
Bank of India (Note Refund)
Rules - Delegation of Powers
of circulars consolidated by the Master Circular
(NR) Rules, 1975, Delegation of full powers to private sector banks maintaining
Rules Scheme of delegation of powers to PSBs for exchange of defective notes -
Disposal of notes bearing pay/paid stamp.
and Exchange of Cut Notes - Liberalisation
(NR) Rules - Delegation of full powers to branches of PSBs and publicity for exchange
of defective notes.
(NR) Rules - Scheme of delegation of full powers for exchange of defective notes
to the branches of PSBs - Publicity.
(NR) Rules - Delegation of powers to chest branches of PSBs.
(NR) Rules - Delegation of full powers there under to PSBs.
(NR) Rules - Scheme of delegation of full powers to PSBs.
(NR) Rules - Scheme of delegation of full powers to PSBs.
(NR) Rules - Scheme of delegation of full powers to PSBs (Amendment).
(NR) Rules 1989 - Bank notes of Rs.500/- denomination - Exchange of defective
notes at branches of PSBs.
Rules - Defective notes branded with `To Claims' stamp of RBI Issue Offices.
(NR) Rules - Delegation of full note exchange powers to PSBs.
(NR) Rules - Delegation of powers to PSBs - Training.
(NR) Rules - Deliberately mutilated notes - Adjudication.
of the Scheme of delegation of full powers under RBI (NR) Rules.
(NR) Rules - Scheme of delegation of full powers to PSBs.
currency notes by writing on them or inscribing messages, slogans etc. thereon.
(NR) Rules - Affixing of `PAY' and `REJECT' stamps on defective notes.
of full powers to PSBs for exchange of defective notes/procedures of the same.
to the public for exchange of soiled notes and slightly mutilated notes.
Bank of India (Note Refund) Rules, 1975 - Delegation of full note exchange powers
to currency chest branches of Public/Private Sector Banks.
Bank of India (Note Refund) Rules, 1975 - Delegation of note exchange powers to
currency chest branches of Public/Private Sector Banks.