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On April 1, 2026, the Reserve Bank of India (RBI) issued a comprehensive Master Direction consolidating guidelines on incentives for currency distribution and exchange, alongside penalty and penal provisions for bank branches and currency chests (CCs). The directive applies to all banks, with specific provisions for CC-holding institutions. The RBI established a financial incentive scheme to encourage banks to strengthen currency management infrastructure and customer service aligned with the Clean Note Policy. Banks operating CCs in North-Eastern regions and inaccessible areas of Jammu and Kashmir and Ladakh can claim up to 100 percent reimbursement of capital expenditure (capped at ₹50 lakh) and 50 percent of revenue costs for five years. Additional incentives include ₹2 per packet for soiled note exchanges, ₹2 per piece for mutilated note adjudication, and ₹65 per bag for coin distribution, with an additional ₹10 per bag in rural and semi-urban areas. The directive establishes penalties for service deficiencies, including ₹10,000 for branch-level exchange failures and ₹5 lakh for multiple violations. ATM cash-outs exceeding ten hours monthly attract ₹10,000 per ATM penalties. CC operational violations incur ₹5,000 to ₹10,000 penalties depending on severity and recurrence. For transaction reporting, CCs must report all movements through the CyM-CC portal by 7 pm on transaction dates. Delayed or incorrect reporting attracts penal interest at 2 percent above the prevailing bank rate. Wrong reporting of soiled note remittances or diversions incurs a flat ₹50,000 penalty. Appeals against penalties must be submitted within one month to regional directors, with limited grounds for waiver consideration. The Master Direction consolidates and withdraws three previous circulars issued between April 2025 and August 2021, effective immediately upon publication on the RBI website.

On April 1, 2026, the Reserve Bank of India (RBI) issued a comprehensive Master Direction consolidating guidelines on incentives for currency distribution and exchange, alongside penalty and penal provisions for bank branches and currency chests (CCs). The directive applies to all banks, with specific provisions for CC-holding institutions. The RBI established a financial incentive scheme to encourage banks to strengthen currency management infrastructure and customer service aligned with the Clean Note Policy. Banks operating CCs in North-Eastern regions and inaccessible areas of Jammu and Kashmir and Ladakh can claim up to 100 percent reimbursement of capital expenditure (capped at ₹50 lakh) and 50 percent of revenue costs for five years. Additional incentives include ₹2 per packet for soiled note exchanges, ₹2 per piece for mutilated note adjudication, and ₹65 per bag for coin distribution, with an additional ₹10 per bag in rural and semi-urban areas. The directive establishes penalties for service deficiencies, including ₹10,000 for branch-level exchange failures and ₹5 lakh for multiple violations. ATM cash-outs exceeding ten hours monthly attract ₹10,000 per ATM penalties. CC operational violations incur ₹5,000 to ₹10,000 penalties depending on severity and recurrence. For transaction reporting, CCs must report all movements through the CyM-CC portal by 7 pm on transaction dates. Delayed or incorrect reporting attracts penal interest at 2 percent above the prevailing bank rate. Wrong reporting of soiled note remittances or diversions incurs a flat ₹50,000 penalty. Appeals against penalties must be submitted within one month to regional directors, with limited grounds for waiver consideration. The Master Direction consolidates and withdraws three previous circulars issued between April 2025 and August 2021, effective immediately upon publication on the RBI website.