Levy of Penal Interest – Delayed Reporting

RBI/2017-18/130
DCM (CC) No. 2885/03.35.01/2017-18

February 9, 2018

1. The Chairman & Managing Director / Chief Executive Officer
(All Banks having currency chests)

2. The Director Treasuries
(State Governments)

Madam / Dear Sir,

Levy of Penal Interest – Delayed Reporting

Please refer to our Master Direction DCM (CC) No.G-2/03.35.01/2017-18 dated October 12, 2017 on captioned subject.

2. Presently, penal interest is levied for all cases where the bank has enjoyed “ineligible” credit in its current account with the RBI on account of wrong / delayed / non-reporting of transactions i.e. the currency chest had reported a net deposit. However, instances of delayed reporting where the currency chest had “net deposit” i.e. the currency chest did not enjoy RBI funds, are being dealt with differently by Issue offices due to absence of clear instructions on the subject.

3. On a review, it has been decided that, penal interest at the prevailing rate for delayed reporting of the instances where the currency chest had reported “net deposit” may not be charged. However, in order to ensure proper discipline in reporting currency chest transactions, a flat penalty of ₹ 50,000 may be levied on the currency chests for delayed reporting as in the case of wrong reporting of soiled note remittances to RBI / diversions shown as “Withdrawal” (para 1.5 of the Master Direction).

4. Other instructions contained in the above Master Direction remain unchanged.

5. The revised instructions would come into effect for all the instances detected on or after the date of issue of the circular.

Yours faithfully,

(Ajay Michyari)
Chief General Manager