The Reserve Bank of India (RBI) issued a circular to the banks asking them to take steps to ensure atleast 40% of the bank notes are supplied to the rural areas, on Tuesday.
In a notification published on its website, the RBI said, “On observing that bank notes, being supplied to rural areas, at present, are not commensurate with the requirements of rural population… 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…”
Here’s the seven-point diktat that the RBI has issued to the banks
Highlights
⇒ Issue fresh notes to rural branches
⇒ Certain percentage of allocation assigned to each district for need-based approach
⇒ All currency chests would have to follow indicated proportion
⇒ Asks currency chests to issue notes of Rs 500 and below
⇒ Issue notes below Rs 100 denomination liberally
⇒ Get coins and ensure supply to the public
1) 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.
2) 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.
3) 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
4) 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
5) Chests should issue bank notes in denominations of Rs 500 and below. In particular ATMs, including WLAOs, may be issued Rs 500s and Rs 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.
6) Existing stock of other denominations notes below Rs 100 should be issued liberally.
7) 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.
Source: dnaindia.com