Banking News

RBI instructs to Chests to allocate 40% cash supply for rural areas

In view of cash supply to rural areas at present are not commensurate with the requirements of rural populations, RBI advised banks to take steps to ensure that at least 40% banknotes are supplied to rural areas.

In terms of RBI notifications the Banks, that all Chests operating in a district level should augment the issuance of fresh notes to rural branches of RRBs, DCCBs and commercial banks, white label ATMs and post offices in rural areas.

Since the requirement of rural areas may be different from one district to other depending upon rural and urban mix, the distribution approach may be on the basis of relative shares in CASA deposits and number of accounts. RBI has assigned the certain percentage of allocation to each district across the country on above proportion. Banks are asked to maintain above proportion at each Chest level on weekly basis.

Further, currency Chests are advised to liberally issue existing stock of below ₹ 100/-. ATMs including WLAOs may be issued the denominational mix of ₹ 500s and ₹ 100s and among ATMs category, Off-site ATMs should be allocated the higher proportion of cash as against on-site ATMs as they are more important in last mile currency connectivity.

To mitigate the issue in a more enduring manner, the banks maintaining currency chests are advised to indent for coins, obtain supply from Issue Departments of Reserve Bank of India, if required and ensure supply to public on the priority basis.

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