Clean Notes Policy: RBI directs banks not to turn away soiled notes

Mumbai: Reserve Bank of India has issued a fresh circular under which it has directed all banks including private lenders to accept spoiled, scribbled or torn-out currency notes, according to a report in NDTV.

Central bank's latest diktat comes in the backdrop of reports that suggested a number of banks were not accepting soiled notes causing hardship to customers. RBI has instructed 'faulting' banks to treat the notes coming in at their counters as 'soiled notes'.

Banks cannot turn away customers who come with soiled notes to deposit at their branches under RBI's 'clean notes policy'. The bankers' bank has also instructed lenders to avoid recycling of scribbled notes they get deposited at their counters.

In its earlier circular, RBI had asked bank staff not scribble or write on bank notes so as not to spoil them. However, the directive was misconstrued by bank staff that might have been a cause of worry for banks. In its consequence, some banks stopped accepting identified notes.

RBI has made exchange of soiled notes much easier for a customer and a non-customer of a bank who can make an over-the-counter exchange of these notes.

The report added that RBI has installed high-speed Currency Verification and Processing Systems machines at all its offices which can process 50,000-60,000 pieces per hour. "Soiled notes are shredded and briquetted on-line," it said.