Tag: coins

The Reserve Bank of India (RBI) decided to up the incentive for banks for distribution of coins from ₹25 per bag to ₹65, with effect from September 1, even as it asked them to provide coins to bulk customers.

The RBI said an additional incentive of ₹10 per bag would be paid for coin distribution in rural and semi-urban areas on the submission of a chartered accountant or auditor certificate to this effect.

The aforementioned measures have been announced keeping in view the overall objectives of the Clean Note Policy, the RBI said in a circular to all banks.

These measures are also aimed at ensuring that all bank branches provide better customer service to members of the public with regard to the exchange of notes and distribution of coins.

Net withdrawals

The central bank emphasised that the revised incentive will be paid on the basis of net withdrawal from currency chests (CCs) without waiting for claims from banks. The currency chest branch will have to pass on the incentive to the linked bank/branches for coins distributed by them on a pro-rata basis within one week of receipt of incentives from the RBI.

The central bank said the distribution of coins will be verified by its regional offices during inspection of currency chest/ incognito visit to branches etc.

Coins to bulk customers

With a view to meet the coin requirements of bulk customers (requirement of more than one bag in a single transaction), banks have been advised to provide coins to such customers purely for business transactions.

Disbursement of coins to retail customers through counters of bank branches will continue as hitherto.

As per the earlier circular on the Currency Distribution & Exchange Scheme (CDES), banks had to 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. According to the new circular, banks may also endeavour to provide coins distribution services as part of their Board-approved policy on ‘Door Step Banking’ services.

Also read: How RBI’s CBDC will change the payments ecosystem

Such customers should be KYC compliant constituents of the bank and the record of coins supplied should be maintained. Banks have been advised to exercise due diligence to ensure that such facility is not misused.

The RBI reiterated that banks should enhance the engagement of their Business Correspondents (BCs) for the distribution of coins to the public and may also incentivise such activities as per their Board-approved policy

All banks have been asked to ensure that each branch maintain a minimum one bag of coins in each denomination.

The central bank also reiterated that banks may engage Cash in Transit (CIT) entities to further enhance the distribution of coins to the public.