Friday, December 27, 2013

Confusion follows RBI circular on scribbled notes

Confusion follows RBI circular on scribbled notes
New Delhi, Dec 17 (KNN) Amidst concerns amongst the traders and on social networking sites that banks may not accept soiled and scribbled notes from January next year following a direction from the RBI, a trader's body has asked the central bank to clear the confusion.

The Central bank has asked banks to classify all "unclean" currency notes - which have any sort of inscription or scribbling on them - as "unfit for reissue" from January 1, 2014.

In order to avoid any confusion on this issue, Confederation of All India Traders (CAIT), an apex body of trade federations, associations and small scale sector of India has received queries regarding non acceptability of soiled or scribbled Indian currency note from January 1, 2014 by commercial banks of India as per a recent RBI directive.

“We have tried to get information regarding such directive of RBI. However, we have not been able to find any such official circular of RBI. The circular which are available on RBI website on soiled currency note directs commercial banks for non-issuance of currency noted either in stapled format or the currency notes which are soiled or scribbled,” the National Secretary General of CAIT, Praveen Khandelwal said in a written letter to the RBI Governor, Raghuram Rajan.

CAIT further requested the RBI Governor to issue a notification or advisory for non-acceptance of Indian currency notes having anything written or scribbled to commercial banks for non-acceptance from January 1, 2014.

In its letter in August to all the banks in India, RBI said, “It has been noticed that at certain branches of banks, the practice of writing/scribbling on the body of the banknotes continues to remain in vogue. Under the present system of mechanized processing of banknotes, inscription or scribbling on any part of the banknote would render it to be classified as unfit for reissue.”

Accordingly, such banknotes get treated as soiled banknotes and cannot be recirculated.

“You are advised to issue suitable instructions to all dealing officers and staff to forthwith stop writing / scribbling of any kind on any part of the banknote to ensure achievement of the objectives of clean note policy,” the letter added.

According to a RBI notification issued in May this year, “In recent periods, instances of certain branches of banks continues to follow old practices like stapling, writing number of note pieces in loose packets on watermark window of notes disfiguring the watermark impression and rendering it difficult for easy recognition have come to our notice.”
“Further, it has also been observed that certain bank branches do not sort notes into re-issuable and non-issuable, and issue soiled notes to public. Such practices are against the “Clean Note Policy” of Reserve Bank of India,” the notification added.

In India, it has been a common practice of writing on the currency notes and stapling them. ATMs face problem in identifying notes with scribbles on them. The RBI has installed high-speed currency verification and processing systems (CVPS) machines at all its offices which deal with currency. These machines are capable of processing 50,000-60,000 pieces per hour and soiled notes are often shredded.

CAIT has been supporting the initiative to keep currency notes clean and in good condition. “You are requested to make people aware that stapling, writing on notes reduces the life of currency notes and hence should be avoided,” CAIT told its members. (KNN/SD)

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