RBI increases incentives for banks for distribution of coins

Representational pic
Representational pic

Mumbai, Aug 27 :The Reserve Bank on Friday increased incentives for banks for distribution of coins to the general public to Rs 65 from Rs 25 per bag.

This has been done keeping in view the overall objectives of clean note policy and to ensure that all bank branches provide better customer service to people with regard to exchange of notes and distribution of coins, the central bank added.

The banks will also be provided an additional incentive of Rs 10 per bag for coin distribution in rural and semi-urban areas, the RBI said in a notification. "With effect from September 1, 2021, an incentive of Rs 65 per bag for distribution of coins (instead of Rs 25 as earlier) will be paid on the basis of net withdrawal from currency chest (CCs), without waiting for claims from banks," the RBI said.

The currency chest branch, it added, will pass on the incentive to the linked bank/branches for coins distributed by them on a pro-rata basis within one week from the receipt of incentives from RBI.

The circular further said with a view to meet the coin requirements of bulk customers (requirement of more than 1 bag in a single transaction), banks are advised to provide coins to such customers purely for business transactions.

The banks may also endeavour to provide such services as part of their board-approved policy on 'Door Step Banking' services.

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

Currently, coins are distributed to retail customers in small lots and not to bulk customers.

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