RBI asks banks to exchange upto 20 soiled notes free of charge

In an effort to improve customer service, the RBI has asked banks to exchange up to 20 pieces of soiled currency notes with a maximum value of Rs 5,000 over the counter, free of charge.However, if the number of notes to be exchanged is more than 20, banks can levy service charge.

The facility of exchanging mutilated or imperfect notes is available at designated bank branches and also non-chest branches”Notes presented in small number .

  • In case notes are presented in bulk (where the number exceeds 20 pieces or Rs 5,000 in value per day), banks will accept them, against receipt, for value to be credited later. In case of bulk exchange, banks can levy service charges. If the tendered value is above Rs 50,000, banks are expected to take the usual precautions, RBI said.
  • Further, the RBI also laid down norms for non-chest branches for exchange of soiled notes. Where the number of notes presented by a person is up to 5 pieces per day, non-chest branches should normally adjudicate the notes as per the procedure and pay the exchange value over the counter.

The Reserve Bank of India(RBI)

The Reserve Bank of India is India’s central banking institution, which controls the monetary policy of the Indian rupee. It commenced its operations on 1 April 1935 (81 years ago) during the British Rule in accordance with the provisions of the Reserve Bank of India Act, 1934.

  • the RBI was nationalised on 1 January 1949.
  • The general superintendence and direction of the RBI is entrusted with the 21-member Central Board of Directors: the Governor, 4 Deputy Governors, 2 Finance Ministry representatives, 10 government-nominated directors to represent important elements from India’s economy, and 4 directors to represent local boards headquartered at Mumbai, Kolkata, Chennai and New Delhi.
  • The bank was set up based on the recommendations of the 1926 Royal Commission on Indian Currency and Finance, also known as the Hilton–Young Commission.

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