RBI/DCM/2018-19/62
Master Direction DCM (CC) No. G - 5/03.35.01/2018-19
July
3, 2018
1. The Chairman & Managing
Director/Chief Executive Officer
(All Banks having Currency Chests)
2. The Director of
Treasuries
(State Governments)
Madam / Dear Sir
Master Direction on Levy of
Penal Interest for Delayed Reporting / Wrong Reporting / Non-Reporting of
Currency Chest Transactions and Inclusion of Ineligible Amounts in Currency
Chest Balances
In terms of the Preamble, 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 efforts
and ensure discipline among the banks on timely and accurate reporting of
currency chest transactions, we have issued instructions on the subject.
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 www.rbi.org.in.
Yours faithfully,
(Manas Ranjan Mohanty)
Chief General Manager
Encl : As above
Annex
1. Penal interest for Delayed
Reporting / Wrong Reporting / Non-Reporting of Currency Chest Transactions
1.1 Reporting of Currency Chest
Transactions
The minimum amount of deposit
into / withdrawal from currency chest will be ? 1,00,000 and thereafter, in
multiples of ? 50,000.
1.2 Time limit for Reporting
1.2.1 The currency chests should invariably report all
transactions through ICCOMS on the same day by 9 PM by uploading data
through the Secured Website (SWS) to their respective link offices. Link
offices should invariably report the consolidated position to the Issue
Offices latest by 11 PM on the same day.
1.2.2 The Sub-Treasury Offices (STOs) should report all
transactions directly to the Issue Office of the Reserve Bank by 11 PM on
the same day.
1.2.3 Relaxation in respect of
strike period in banks
Relaxation in the reporting
period on account of general / specific strike situation will be considered
on case-to-case basis.
1.3 Levy of penal interest for
delays
1.3.1 In the event of delay in reporting currency chest
transactions, penal interest at the rate indicated in paragraph 3 of this circular will be levied
on the amount due from the chest holding bank for the period of delay.
Penal interest will be calculated on T+0 basis i.e. penal interest will be
levied in respect of transactions not reported by Link Office to the Issue
Office by 11 PM on the same business day. However, Reserve Bank may at its
discretion grant appropriate grace period in the matter of levy of penal
interest.
1.3.2 Penal interest will also be charged for delay in
submission of chest slips in the case of single chest / STOs directly
linked to Issue Department of the circle.
1.4 Wrong reporting and levy of
penal interest
Penal interest will be levied in
respect of all cases of wrong reporting in the same manner till the date of
receipt of corrected advice by Reserve Bank. As debits/credits to banks'
current accounts are raised on the basis of the figures reported in the
Link Office Statements, penal interest will invariably be levied in all
cases of wrong reporting in the Link Office Statements even if the
reporting was done correctly in the chest slips. It is expected that Link
Offices would ensure the correctness of figures reported by the respective
currency chests. Particular care should be taken to ensure that remittances
of fresh notes/notes to the currency chests are not reported as 'deposit'
transactions in the Link Office Statements.
1.5 Reporting of Soiled note
remittances to RBI / diversion to other chests
Soiled note remittances to RBI /
diversion to other currency chest/s should not be shown as withdrawal by
chest/s / link offices. In case such remittances are wrongly reported as
'withdrawals', a penalty of ? 50,000 will be levied irrespective of the
value of remittance and period of such wrong reporting.
1.6 Delayed reporting where
currency chests had “Net Deposit”
Penal interest at the prevailing
rate for delayed reporting of the instances where the currency chest had
reported “net deposit” may not be charged. However, in order to ensure
proper discipline in reporting in reporting currency chest transactions, a
flat penalty of ? 50,000 may be levied on the currency chests for delayed
reporting irrespective of the value of net deposit.
1.7 Reporting of diversions in
ICCOMS
As regards reporting of
diversion/s in ICCOMS, they must be reported in the column "2A and 4
A" i.e. the chest receiving the diversion should report under 2 A and
the remitting chest should report the amount under 4A in the chest slip
without any delay. Diversion amounts, even to the chest of the same bank
should not be reported under "Withdrawal" and "Deposit"
columns i.e. 4E and 2E (which are for currency transfer transactions).
1.8 Maximum penal interest to be
charged
There is no stipulation
regarding the maximum amount of penal interest leviable for wrong / delayed
reporting. As the intention is to ensure timely and correct reporting of
chest transactions, penal interest will be recovered in all applicable
cases, irrespective of the amount of the transaction concerned / amount of
penal interest subject to rounding off the penal interest amount to the
nearest Rupee.
2. Penal interest for inclusion
of ineligible amounts in the currency chest balances
2.1 Penal interest will be levied in all cases where
the bank has enjoyed 'ineligible' credit in its current account with
Reserve Bank on account of wrong reporting / delayed reporting /
non-reporting of transactions. Penal measures will also be taken in cases
of shortages in chest balances / remittances, shortages due to pilferage /
frauds, counterfeit banknotes detected in chest balances / remittances as
per the prevailing “scheme of Penalties”.
2.2 Further, only cash held in the custody of joint
custodians and 'freely available' to them is eligible for inclusion in the
chest balances. Thus, cash kept for safe custody in sealed covers for
whatever reasons/cash in trunks/bins under the lock and key of any
official/s other than the Joint Custodians or bearing a third lock put by
any official in addition to the two locks of the Joint Custodians is not
eligible for being included in the chest balances. If such amounts are
included in the chest balances, these will be treated as instances of wrong
reporting and will attract penal interest at the rate specified in para 3.
2.3 In all the above cases (excepting shortages in
chest balances / remittances, shortages due to pilferage / frauds,
counterfeit banknotes detected in chest balances / remittances), penal
interest will be levied from the date of inclusion of 'ineligible' amounts
in chest balances till the exclusion of such amounts from chest balances.
Penal measures for shortages in chest balances / remittances, shortages due
to pilferage / frauds, counterfeit banknotes detected in chest balances /
remittances will be taken on the basis of prevailing “scheme of Penalties”.
3. Rate of penal interest
Penal interest shall be levied
at the rate of 2% over the prevailing Bank Rate for the period of delayed
reporting/wrong reporting/non-reporting /inclusion of ineligible amounts in
chest balances.
4. Levy of penal interest in
respect of currency chests at treasuries
The above instructions shall be
applicable to currency chests at treasury/sub-treasury offices also.
5. Representations
5.1 As the sole criterion for levy of penal interest
for delayed reporting is the number of days of delay, there should
ordinarily be no occasion for banks to request for reconsideration of the
Reserve Bank's decision in individual cases. However, representations, if
any, on account of genuine difficulties faced by chests especially in
hilly/remote areas and those affected by natural calamities, etc., may be
made to the Issue Office concerned through the Head / Controlling office of
the bank concerned within a month from the date of debit of the bank
concerned.
5.2 In the case of wrong reporting representations
for waiver will not be considered. {cf. para 1(e) above}.
5.3 As the intention behind the levy of penal interest
is to inculcate discipline among banks so as to ensure prompt/correct
reporting, pleas by banks for waiver of penal interest on grounds that
delayed/wrong/non-reporting did not result in utilization of the Reserve
Bank's funds or shortfall in the maintenance of CRR/SLR or that they were
the result of clerical mistakes, unintentional or arithmetical errors,
first time error, inexperience of staff etc., will not be
considered as valid grounds for waiver of penal interest. Further, we will
take a serious view of all such lapses.
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