DCM (CC) No.G-4/03.44.01/2018–19
The Chairman & Managing
Chief Executive Officers
Madam / Dear Sir,
Master Circular – Scheme of
Penalties for bank branches based on performance in rendering customer
service to the members of public
Please refer to the Circular DCM (CC) No.G-3/03.44.01/2017-18 dated October
12, 2017 on the scheme of penalties.
2. A revised and updated version
on the subject is annexed for
information and necessary action.
3. This Master Circular is
available on our website www.rbi.org.in.
(Manas Ranjan Mohanty)
Chief General Manager
Encl: As above
Master Circular on the Scheme of
Penalties for bank branches including currency chests based on performance
in rendering customer service to members of public
1. The Scheme of Penalties for
bank branches including currency chests has been formulated in order to
ensure that all bank branches provide better customer service to members of
public with regard to exchange of notes and coins, in keeping with the
objectives of Clean Note Policy.
Penalties to be imposed on banks
for deficiencies in exchange of notes and coins / remittances sent to RBI /
operations of currency chests etc. are as follows:
Shortages in soiled note
remittances and currency chest balances
For notes in denomination upto
? 50 per piece in addition to the loss
For notes in denomination of ?
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.
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 shall be levied in terms of the
instructions issued by DCM (FNVD)
No.G-1/16.01.05/2018-19 dated July 02, 2018.
Mutilated notes detected in
soiled note remittances and currency chest balances
? 50 per piece irrespective of
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.
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 ? 5000 for each
Penalty will be enhanced to ? 10,000 in case of repetition.
Penalty will be levied immediately.
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
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 ? 50
and below) tendered by members of public and linked bank branches.
f) Detection of mutilated /counterfeit notes in re-issuable packets
prepared by the currency chest branches.
? 10,000 for any violation of
agreement or deficiency of service.
? 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.
3. Operational Guidelines on
levy of penalties –
3.1 Competent Authority –
The Competent Authority to decide the nature of irregularity will 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 of the Regional Office
concerned, within one month from the date
of debit, who may decide whether the
same can be accepted/ rejected.
ii. Appeals for waiver of
penalty made on grounds such as staff being new/untrained, lack of
awareness of staff, corrective action having been taken/will be taken, etc.
will not be considered.