On April 01, 2022, the Reserve Bank of India (RBI) has issued Master Direction on Penal Provisions in deficiencies in reporting of transactions/ balances at Currency Chests.
Key points:
- 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.
- Time limit for Reporting: The currency chests should invariably report all transactions through CyM – CC portal on the same day by 7 pm.
- Relaxation on account of strike in banks: Relaxation in the reporting period on account of strike situation will be considered on case-to-case basis.
- Delay in Reporting: In the event of delay in reporting currency chest transactions, penal interest at the rate indicated in paragraph 4 of this circular shall be levied on the amount due from the chest holding bank for the period of delay. Penal interest shall be calculated on T+0 basis i.e. penal interest shall be levied in respect of transactions not reported by currency chests to the Issue Office on the same business day within the time limit prescribed above.
- Wrong reporting: Penal interest shall be levied in respect of 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 transactions reported by the currency chests, penal interest shall invariably be levied in all cases of wrong reporting by the currency chests. It is expected that currency chests would ensure the correctness of figures reported on the CyM – CC portal. Particular care shall be taken to ensure that remittances of fresh notes/re-issuable notes sent to the currency chests from RBI/press are not reported as ‘deposit’ transactions.
- Inclusion of ineligible amounts in the currency chest balances: Penal interest shall 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 for other deficiencies: Penal measures for shortages in chest balances / remittances, shortages due to pilferage / frauds, counterfeit banknotes detected in chest balances / remittances shall be taken on the basis of prevailing “Scheme of Penalties”.
- Reporting of soiled note remittances to RBI– Soiled note remittances to RBI shall not be shown as withdrawal by chest(s). In case such remittances to RBI are wrongly reported as ‘withdrawal’, a penalty of ₹50,000 shall be levied irrespective of the value of remittance and period of such wrong reporting.
- Reporting of diversions in CyM – CC portal: All currency chest diversions (both between chests of the same bank and between chests of different banks) have to be reported through ‘Diversion Module’ of CyM-CC Portal. The CC sending the diversion should initiate the diversion entry. The receiving CC should acknowledge the same. Diversions should not be reported as deposit/withdrawal. A penalty of ₹50,000 shall be levied for any such wrong reporting.
- 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” shall not be charged. However, in order to ensure proper discipline in reporting currency chest transactions, a flat penalty of ₹50,000 shall be levied on the currency chests for delayed reporting, irrespective of the value of net deposit.
- 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.