Master Direction – Scheme of Penalties for bank branches and currency chests for deficiency in rendering customer service to the members of public - RBI - Reserve Bank of India
Master Direction – Scheme of Penalties for bank branches and currency chests for deficiency in rendering customer service to the members of public
RBI/DCM/2025-26/131 April 01, 2025 The Chairman / Managing Director / Chief Executive Officer Madam / Dear Sir, Master Direction – Scheme of Penalties for bank branches and currency chests for deficiency in rendering customer service to the members of public 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. 2. The Master Direction incorporating the updated guidelines / circulars on the subject is at Annex-I. The Frequently Asked Questions (FAQs) and few Illustrations are at Annexes II and III respectively. Yours faithfully (Sanjeev Prakash) Encl: As above Master Direction on the Scheme of Penalties for bank branches and currency chests for deficiency in rendering customer service to members of public 1. 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. 2. Penalties Penalties to be imposed on banks for non- compliance with operational guidelines and Memorandum of Agreement, deficiencies in remittances sent to RBI, exchange of notes, operations of currency chests, replenishment of cash in ATMs, etc., are as follows:
3. Operational Guidelines on levy of penalties 3.1 Competent Authority The Competent Authority to decide upon the nature of irregularity shall be the Officer-in-Charge of the Issue Department of the Regional Office under whose jurisdiction the defaulting currency chest / bank branch is located. 3.2 Appellate Authority i. Appeal against the decision of the Competent Authority may be made by the Controlling Office of the currency chest / branch to the Regional Director / Chief General Manager / Officer-in-Charge of the Regional Office concerned, within one month from the date of debit, who shall decide whether the same can be accepted (in full or part) / rejected. Penalty waiver request would be considered only if the application for the same is made in the CyM-CC portal. Waiver requests in any other mode shall not be entertained. Appeals shall not be made in routine manner. ii. Appeals for waiver of penalty made on grounds such as staff being new / untrained, lack of awareness, corrective action having been taken / shall be taken, etc., shall not be considered. Frequently Asked Questions Master Direction – Scheme of Penalties for bank branches and currency chests for deficiency in rendering customer service to the members of public 1. What is Clean Note Policy? It is a policy adopted by RBI to ensure availability of good quality banknotes to members of the public. 2. What is Memorandum of Agreement (MoA)? Before considering the first specific application for opening of a currency chest, a general MoA is entered between the Reserve Bank of India and the bank concerned, setting out the terms and conditions governing the entrustment of currency chest responsibilities to the bank. 3. What are linked branches? These are the bank branches linked with nearby currency chests under Linkage Scheme, formulated by RBI mainly with a view to provide chest facilities to all non-chest bank branches at the same centre as far as possible. 4. What are ‘soiled’, ‘mutilated’ and ‘imperfect notes’? 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. A ‘mutilated note’ means a note of which a portion is missing or which is composed of more than two pieces. An ‘imperfect note’ means any note, which is wholly or partially, obliterated, shrunk, washed, altered or indecipherable but does not include a mutilated note. Illustration Master Direction – Scheme of Penalties for bank branches and currency chests for deficiency in rendering customer service to the members of public 1. Penalty for shortages of notes in soiled note remittances (SNRs) and shortages of notes and coins in currency chest balances: Example:
2. Penalty for Mutilated notes (including deliberately cut notes and built-up notes) detected in soiled note remittances and currency chest balances Example:
3. Non-compliance with operational guidelines by currency chests detected by RBI officials In case of non-functioning of CCTV, non-compliance with rules / guidelines pertaining to CCTV recording, preservation period, and related issues, penalty of ₹5,000/- for each instance of irregularity shall be levied. Penalty shall be enhanced to ₹10,000/- in case of repetition / recurrence of irregularity in consecutive inspection cycles or earlier. Example: If CCTV in the currency chest is found to be non-functional during inspection/ audit, a penalty of ₹5,000/- will be levied. If the same issue recurs during the next inspection cycle or earlier, ₹10,000/- will be levied. [1] Small Finance Banks (up to two years from the commencement of their banking business) and Payment Banks may exchange mutilated and defective notes at their option. |