Sr.No.

Nature of Service

Particulars of Incentives

(i)

Opening of and maintaining currency chests at centers having population of less than 1 lakh in under banked States.

(a) Capital Cost: Reimbursement of 50% of capital expenditure subject to a ceiling of Rs.50 lakh per currency chest.  In the North Eastern region upto 100% of capital expenditure is eligible for reimbursement subject to the ceiling of Rs.50 lakh.

(b) Revenue cost: Reimbursement of 50% of revenue expenditure for the first 3 years. In the North Eastern region 50% of revenue expenditure will be reimbursed for the first 5 years.

(ii)

Exchange of soiled notes/ adjudication of mutilated banknotes over the counter at bank branches

a. Exchange of soiled notes - Rs.1/- per packet for exchange of soiled notes upto Rs.50/-
b. Adjudication of mutilated notes - Rs.2/- per piece

(iii)

Distribution of coins over counter

Rs.25/- per bag for distribution of coins over the counter.

(iv)

Establishment of Coin Vending Machines

The existing level of incentives of
a) Capital cost reimbursement of 50% of capital expenditure in case of Urban / Metro centres and reimbursement of 75% of capital expenditure in case of rural and semi urban centres.
b) reimbursement of revenue cost at Rs.25/- per bag as applicable to commercial banks maintaining currency chests would now be applicable to all scheduled commercial banks including urban co-op. banks and RRBs(irrespective of whether they maintain currency chest or not)

Sr.No.

Nature of Irregularity

Penalty

i.

Shortages in soiled note remittances and currency chest balances

For notes in denomination upto Rs.50
Rs.50/- per piece in addition to the loss
For notes in denomination of Rs.100 & above
Equal to the value of the denomination per piece in addition to the loss.
Shortages of 100 pieces and above per remittance shall be debited immediately.  Penalty may be levied on reaching a limit of 100 pieces in a cumulative manner.

 ii.

Counterfeit notes detected in soiled note remittances and currency chest balances.

Penalty on account of detection of counterfeit notes by RBI from soiled note remittance of banks and in currency chest balances will henceforth be three times the notional value of counterfeit notes.

In case it is found during RBI Inspection, Snap Inspection etc. that a bank branch or currency chest has detected counterfeit notes but not reported the same to RBI or Police, strict regulatory measures against the bank including stringent disciplinary action and /or imposition of monetary penalty, will be taken by RBI.

Penalty will be levied immediately for any counterfeit note detected.

iii.

Mutilated notes detected in soiled note remittances and currency chest balances

Rs.50/- per piece irrespective of the denomination

Mutilated notes of 100 pieces and above per remittance shall be debited immediately. Penalty may be levied on reaching a limit of 100 pieces in a cumulative manner. 

iv.

Non-compliance with operational guidelines by currency chests detected by RBI officials

a) Non-functioning of CCTV

b) Branch cash/documents kept in strong room

c) Non-utilization of NSMs for sorting of notes (NSMs not used for sorting of high denomination notes received over the counter or not used for sorting notes remitted to chest/RBI)

Penalty of Rs.5000 for each irregularity.
Penalty will be enhanced to Rs.10,000 in case of repetition.
Penalty will be levied immediately.

v.

Violation of any term 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 branch to exchange soiled notes / refusal by any currency chest branch to adjudicate mutilated notes  tendered by any member of public

c) Non conduct of surprise verification of chest balances, at least at bimonthly intervals, by officials unconnected with the custody thereof and by the officials from the Controlling Office once in six months.

d) Denial of facilities/services to linked branches of other banks.

e) Non acceptance of lower denomination notes (i.e. denomination of Rs. 50 and below) tendered by members of public and linked bank branches.

f) Detection of mutilated/counterfeit notes in reissuable packets prepared by the currency chest branches.

Rs.10,000 for any violation of agreement  or deficiency of service.

Rs.5 lakh in case there are more than 5 instances of violation of agreement/deficiency in service by the branch. The levy of such penalty will be placed in public domain.

Penalty will be levied immediately.