Master Direction DCM (CC) No.G-4/03.41.01/2016-17
July 20, 2016
The Chairman and Managing Director /
Chief Executive Officers,
Madam / Dear Sir,
Master Direction on Currency Distribution & Exchange Scheme (CDES) based on performance in rendering customer service to the members of public
In terms of the Preamble and under Section 45 of the RBI Act, 1934, and 35 A of the Banking Regulation Act, 1949, the Bank issues guidelines / instructions for realising the objectives of our Clean Note Policy. With a view to sustain these objectives, the Bank has formulated a scheme of incentives titled Currency Distribution and Exchange Scheme (CDES) in order to ensure that all bank branches provide better customer services to member of public.
2. The Master Direction enclosed incorporates updated guidelines / circulars on the subject. The Direction will be updated from time to time as and when fresh instructions are issued.
3. This Master Direction has been placed on RBI website at rbi.org.in.
(P. Vijaya Kumar)
Chief General Manager
Encl : As above
1. Introduction –
The Currency Distribution & Exchange Scheme (CDES) 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.
As per the scheme, banks are eligible for the following financial incentives for providing facilities for exchange of notes and coins:
Opening of and maintaining
currency chests at centers having population of less than 1 lakh in under
a. Capital Cost: Reimbursement of 50% of capital expenditure subject
to a ceiling of ? 50 lakh per currency chest. In the North Eastern region up
to 100% of capital expenditure is eligible for reimbursement subject to the
ceiling of ? 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.
Exchange of soiled notes/
adjudication of mutilated banknotes over the counter at bank branches 1. Cash
a. Exchange of soiled notes – ? 2 per packet for exchange of soiled notes up to
denomination ? 50
b. Adjudication of mutilated notes – ? 2 per piece –
Distribution of coins over counter
i. ? 25 per bag for distribution
of coins over the counter.
ii. The incentives would be paid
on the basis of withdrawal from currency chest, without waiting for claims
iii. Banks may put in place a
system of checks and balances to ensure that coins are distributed to retail
customers in small lots and not to bulk customers.
iv. The distribution of coins
shall be verified by RBI Regional Offices through inspection of currency
chest / incognito visits to branches etc.
Installation of Machines which
extend cash related retail services to the public like –
1. Cash Recyclers;
2. ATMs dispensing lower denomination notes (i.e.
up to denomination ? 100)
Note - ATMs distributing higher denominations of ? 500
and above are not eligible for this reimbursement
2. ATMs dispensing lower
denomination notes (up to denomination ? 100) – 50% of the actual cost of the
machine or ? 2,00,000 whichever is lower
For Semi-urban / Rural areas –
1. Cash Recyclers – 60% of the
actual cost of the machine or ? 2,50,000 whichever is lower
2. ATMs dispensing lower
denomination notes (up to denomination ? 100) – 60% of the actual cost of the
machine or ? 2,50,000 whichever is lower
Operational Guidelines to avail the incentives -
Performance based incentives -
i) The incentives will be paid on
the soiled notes actually received in the Issue Office of the RBI. Banks need
not submit a separate claim in this regard. Currency chest branch will have to
pass on the incentive to the linked branches for the soiled notes tendered by
them on a pro-rata basis.
ii) Similarly, incentive will be
paid in respect of the adjudicated notes received along with the soiled note
remittances / sent separately by registered / insured post in a sealed cover to
the RBI. No separate claim is required to be made.
Incentives for installation of machines
i) The banks intending to purchase
various machines as also establish currency chests during the period from July
01st to June 30th of a year, may submit their Annual Plans containing the
details of the machines and the cost, to our Issue
Offices latest by April 15 of every year on an ongoing basis.
Our Issue offices, on receipt of the plans, may advise the maximum amount of
reimbursement permissible to each bank for that year.
ii) The claims for incentives for
installation of Cash Recyclers and ATMs dispensing lower denomination notes should
be submitted to the respective Issue Office of RBI on quarterly basis within 30
days from the close of the respective quarter through the Link Office of the
bank concerned. Such claims may however be submitted only after full payment is
made to the vendors for the machines.