The Reserve Bank of India (RBI) increased incentives for banks for the distribution of coins to the general public to Rs 65 from Rs 25 per bag, with effect from September 1, 2021. The central bank, while reviewing incentives and other measures to enhance the distribution of coins, announced that the banks will also be provided an additional incentive of Rs 10 per bag for coin distribution in rural and semi-urban areas.
“With effect from September 1, 2021, an incentive of Rs 65 per bag for distribution of coins (instead of Rs 25 as earlier) will be paid on the basis of net withdrawal from currency chest (CCs), without waiting for claims from banks,” the RBI said in a circular on Friday, August 27.
The currency chest branch will pass on the incentive to the linked bank or branches for the coins to be distributed by them on a pro-rata basis within one week from the receipt of incentives from the RBI. The distribution of coins will also be verified by the RBI regional offices during the inspection of the currency chest.
In order to meet the coin requirements of bulk customers – who require more than one bag in a single transaction, banks are advised to provide coins to such customers purely for business transactions, according to the RBI statement.
RBI also stated that banks should provide such services as part of their board-approved policy on ”oor step banking” services.
“Such customers should be KYC compliant constituents of the bank and the record of coins supplied should be maintained. Banks are advised to exercise due diligence to ensure that such facility is not misused,” it added. Presently, coins are distributed to retail customers in small lots and not to the bulk customers.
The currency chest branch will pass on the incentive to the linked bank or branches for the coins to be distributed by them on a pro-rata basis within one week from the receipt of incentives from the RBI.
The central bank added that banks should enhance their engagement with business correspondents, and use cash-in-transit agencies for the distribution of coins.