RBI/2016-17/207
DCM (Plg) No.2200/10.27.00/2016-17
January 03, 2017
The Chairman / Managing Director/ Chief Executive Officer,
(All banks with currency chests)
Dear Sir / Madam
Allocation of cash for rural areas
Please refer to our circulars DCM (Plg) No.1345/10.27.00/2016-17 dated November 22, 2016 and DCM (Plg) No.1508/10.27.00/2016-17 dated December 02, 2016 on making cash available for rural areas.
2. On observing that bank notes, being supplied to rural areas, at
present, are not commensurate with the requirements of rural population,
some steps have already been initiated as indicated in the above
circulars. With a view to ensure that at least 40% bank notes are
supplied to rural areas and to mitigate the issue in a more enduring
manner, the banks maintaining currency chests are advised to take the
following steps, in continuation of the above.
Distribution Channels and Proportion of currency flow
i. Banks should
advise their currency chests to step up issuance of fresh notes to rural
branches of RRBs, DCCBs and commercial banks, White Label ATMs in rural
areas and post offices in rural areas on priority basis which are considered main rural channels of distribution.
ii. As the rural requirements could vary from district to district
depending on variations in the rural and urban mix of each district in
terms of relative shares in CASA deposits and number of deposit
accounts, to facilitate a need based approach in this regard a certain
percentage of allocation has been assigned to each district as per Annex 1 depending on the rural and urban mix.
iii. Accordingly, all Chests operating in a district must issue bank
notes to the above mentioned distribution channels in the indicated
proportion. The indicated proportion may be maintained on weekly average
basis at each chest level as it may be difficult to stick to the
proportion on daily basis.
Reporting for monitoring
iv. Currency chests must furnish daily issuances to the above categories
to their Link Offices (LO) along with chest slips with a weekly summary
as at close of business on every Friday. LOs should in turn forward it
to the RBI’s Regional Office concerned (reporting format annexed) to
facilitate a review. It may be similar to the chest balances reporting
mechanism (Annex 2). LOs may monitor the daily reports to avoid lumpiness in issuances and to ensure that issuances are evenly.
Denominational mix
v. Chests should issue bank notes in denominations of ₹ 500 and below.
In particular ATMs, including WLAOs, may be issued ₹ 500s and ₹ 100s and
among ATMs category, Off-site ATMs should be allocated higher
proportion of cash as against on site ATMs as they are more important in
last mile currency connectivity.
vi. Existing stock of other denominations notes below ₹ 100 should be issued liberally.
vii. Banks should indent for coins, obtain supply from Issue Departments
of Reserve Bank of India, if required, and ensure supply to public on
priority basis.
3. Please acknowledge receipt.
Yours faithfully,
(P Vijaya Kumar)
Chief General Manager
Encl: As above
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