Currency Distribution & Exchange Scheme (CDES) for bank branches based on performance in rendering customer service to the members of public

RBI/2015-16/393
DCM (CC) No.G-10/3352/03.41.01/2015-16

May 05, 2016

The Chairman & Managing Director /
Chief Executive Officer,
All Banks

Madam / Dear Sir,

Currency Distribution & Exchange Scheme (CDES) for bank branches based on performance in rendering customer service to the members of public

Please refer to our Circular DCM (CC) No.4846/03.41.01/2014-15 dated May 21, 2015 on “The Scheme of Incentives & Penalties – Review”.

2. As advised therein, the scheme of Incentives & Penalties has since been reviewed. On review, it has been decided to segregate the scheme of incentives from penalties as also to revise certain incentives. Accordingly, the new scheme titled “Currency Distribution & Exchange Scheme (CDES)” containing revised incentives is framed and the same is being annexed for information and necessary action. In terms of the above scheme, the performance based incentives will continue to be paid as hitherto w.e.f July 01, 2015; however, the incentives for installation of machines have been restricted to Cash Recyclers & ATMs dispensing lower denomination notes, subject to certain caps on reimbursement of cost per machine and will be effective from the date of the circular.

3. The matter relating to penalties is being reviewed. Pending issue of the same, levy of penalties as under the scheme of Incentives & Penalties issued vide ourMaster Circular No. G-5/03.39.01/2014-15 dated July 01, 2014, shall remain in force.

4. The circular is available on our website – www.rbi.org.in.

Yours faithfully,

(P. Vijaya Kumar)
Chief General Manager

Encl : As above

Annex

Circular on “Currency Distribution & Exchange Scheme (CDES)” for bank branches including currency chests based on performance in rendering customer service to members of public

1. The Currency Distribution & Exchange Scheme (CDES) for bank branches including currency chests has been formulated in order to ensure that all bank branches provide better customer service to members of public with regard to exchange of notes and coins, in keeping with the objectives of Clean Note Policy.

2. Incentives

As per the scheme, banks are eligible for the following financial incentives for providing facilities for exchange of notes and coins:

3. Operational Guidelines to avail the incentives -

3.1 Performance based incentives -

i) The incentives will be paid on the soiled notes actually received in the Issue Office of the RBI. Banks need not submit a separate claim in this regard. Currency chest branch will have to pass on the incentive to the linked branches for the soiled notes tendered by them on a pro-rata basis.

ii) Similarly, incentive will be paid in respect of the adjudicated notes received along with the soiled note remittances / sent separately by registered / insured post in a sealed cover to the RBI. No separate claim is required to be made.

3.2 Incentives for installation of machines

i) The banks intending to purchase various machines as also establish currency chests during the period from July 01st to June 30th of a year, may submit their Annual Plans containing the details of the machines and the cost, to our Issue Offices latest by April 15 of every year on an ongoing basis. Our Issue offices, on receipt of the plans, may advise the maximum amount of reimbursement permissible to each bank for that year.

As regards the ensuing year (i.e. July 01, 2016 to June 30, 2017), the proposals may please be submitted latest by May 31, 2016 as a special case.

For the current year (July 01, 2015 to June 30, 2016), the banks may indicate their plans for purchase of machines from the date of the circular to June 30, 2016, to our Issue offices by May 31, 2016 separately.

ii) The claims for incentives for installation of Cash Recyclers and ATMs dispensing lower denomination notes should be submitted to the respective Issue Office of RBI on quarterly basis within 30 days from the close of the respective quarter through the Link Office of the bank concerned. Such claims may however be submitted only after full payment is made to the vendors for the machines.