RBI/2004/201 DCM(CC)No.G- 1 /03.35.01/2004-05, DT.01/07/2004
Master Circular-Levy of Penal Interest for Delayed Reporting / Wrong Reporting / Non-Reporting of Currency Chest transactions and cases involving Shortages in Currency Chest Balances
In supersession of all existing instructions/guidelines relating to levy of penal interest for delayed reporting/wrong reporting/non-reporting of currency chest transactions and cases of shortages in the chest balances, the following fresh instructions/guidelines are issued:
1. Reporting of Currency Chest Transactions
a. The minimum amount of deposit into/ withdrawal from Currency Chests will hereafter be Rs.1,00,000 (instead of Rs.1,000 as at present) and thereafter, it will be in multiples of Rs.50,000/- (instead of Rs.500 as at present).
b. Time limit for reporting
The Currency Chests should invariably report all transactions to the Link Office on the same day and the Link Office in turn should report the consolidated position to the Issue Office on the next working day. The Sub-Treasury Offices should report all transactions direct to the Issue Office of the Reserve Bank on the same day.
c. Levy of penal interest for delays
In the event of delay beyond three clear working days (including the date of transaction) in reporting of figures relating to a particular chest in the Link Office Statement, or delay in submission of the Chest Slip in the case of single chest or STOs directly linked to Issue Department of the Circle, penal interest at the rate indicated in Para 3 below will be levied for the period of delay excluding the date of transaction and date of receipt of figures/chest slip. Such penal interest will be levied on the amount due from the chest holding bank.
d. Wrong reporting and levy of penal interest
Penal Interest will also be levied in respect of all cases of wrong reporting in the same manner till the date of receipt of corrected advice by the Bank. It is expected that Link Offices should ensure the correctness of figures reported by the respective Currency Chests.
e. A few examples are given in annexure.
2. Shortages in Currency Chest balances due to pilferage/frauds or otherwise and inclusion of amounts of safe custody deposits in chest balances
Penal Interest will be levied on the entire amount of shortage detected in the chest balances from the date following the date when the chest balance was last verified by RBI inspectors/bank's internal inspectors/ bank's/government's own officers deputed for the purpose till the date when the shortage is made good. However, in cases where it is possible to determine the exact date of occurrence of the shortage, penal interest may be charged from such date. Likewise, penal interest will be levied in respect of amounts, if any, kept in safe custody in sealed covers, trunks, etc. on behalf of Courts, Government Departments, etc., and included in the chest balance, from the date of inclusion of such amounts in chest balance till the date of removal thereof. The currency chest is not supposed to keep such amounts as a part of chest balance.
3. Rate of Penal Interest
The penal interest shall be levied at Bank Rate as applicable during the period of irregularity plus 2 %.
4. Levy of Penal Interest in respect of Currency Chests at Treasuries
The above instructions shall be applicable to Currency Chests at Sub-Treasury Offices also.
5. Date of effect
The instructions contained in this circular shall be effective from August 1, 2004.
6. Representations
As the sole criterion for the levy of penal interest will be the number of days of delay, there should ordinarily be no occasion for banks to request for reconsideration of the Bank's decision in individual cases. However representations, if any, on account of genuine difficulties faced by chests especially in hilly / remote areas and other chests affected by natural calamities, etc, should be made only to the concerned Regional Office of the Issue Department. As the intention behind the levy of penal interest is to inculcate discipline among banks so as to ensure prompt/ correct reporting, pleas by banks such as non-utilisation of the Bank's funds, no shortfall in the maintenance of CRR/SLR, clerical error, unintentional or arithmetical error, etc., will not be considered as valid grounds for waiver of penal interest.
7. Please acknowledge receipt.
Yours faithfully,
Sd/-
(V.R.Gaikwad)
Chief General Manager
ANNEXUREExample 1. All cases of delayed reporting, where utilisation of RBI's fund i.e. where the bank's current A/c stands credited is involved
| Days/dates of transaction | Details of transactions |
| 1st Day (01.06.2004) | Date of Transaction |
| 2nd Day (02.06.2004) | Working Day |
| 3rd Day (03.06.2004) | Working Day (If reported, no penal interest will be levied) |
| 4th Day (04.06.2004) | Working Day (If reported, penal interest will be levied for both days i.e. 2nd and 3rd day) |
Example 2. Wrong reporting-When excess deposit is reported
| Days/dates of transaction | Days/dates of transaction |
| 1st Day (01.06.2004) | Date of Transaction (Deposit of Rs. 5,00,000/-) |
| 2nd Day (02.06.2004) | Working Day |
| 3rd Day (03.06.2004) | Working Day ( Reported wrongly as deposit of Rs. 50,00,000/-) |
| 4th Day (04.06.2004) | Working Day |
| 5th Day (05.06.2004) | Holiday |
| 6th Day (06.06.2004) | Working Day
(If the corrected advice is received on 6th Day, the penal interest will be levied from 2nd day to 5th day, both days inclusive on Rs.50,00,000–Rs.5,00,000 =Rs.45,00,000/) |
Example 3. Wrong reporting-When less withdrawal is reported
| Days/dates of transaction | Days/dates of transaction |
| 1st Day (01.06.2004) | Date of Transaction (Withdrawal of Rs. 5,00,000/-) |
| 2nd Day (02.06.2004) | Working Day |
| 3rd Day (03.06.2004) | Working Day (Reported wrongly as withdrawal of Rs. 50,000/-). |
| 4th Day (04.06.2004) | Working Day |
| 5th Day (05.06.2004) | Holiday |
| 6th Day (06.06.2004) | Working Day (If the amount reported wrongly on 3rd day and a corrected advice is received on 6th Day, the penal interest will be levied from 2nd day to 5th day, both days inclusive on Rs.5,00,000–Rs.50,000 =Rs.4,50,000/) |
Example 4. Wrong reporting-When inward remittance from RBI or other currency chest is reported as deposit.
Treatment similar to Example -2
Example 5. Wrong reporting-When deposit is reported as withdrawal.
| Days/dates of transaction | Days/dates of transaction |
| 1st Day (01.06.2004) | Date of Transaction (Deposit of Rs. 5,00,000/-) |
| 2nd Day (02.06.2004) | Working Day |
| 3rd Day (03.06.2004) | Working Day (Reported as withdrawal of Rs. 5,00,000/- ) |
| 4th Day (04.06.2004) | Working Day |
| 5th Day (05.06.2004) | Working Day (If the amount reported wrongly on 3rd day is reported with a corrected advice as deposit, on 5th Day, no penal interest will be levied) |
List of the Director of Treasuries
1. The Director of Treasuries
Government of Gujarat
Ahmedabad
2. The Director of Treasuries
Government of Karnataka
Bangalore
3. The Director of Treasuries
Government of Madhya Pradesh
Bhopal
4. The Director of Treasuries
Government of Maharashtra
Mumbai
5. The Director of Treasuries
Government of Himachal Pradesh
Chandigarh
6. The Director of Treasuries
Government of Tamil Nadu
Chennai
7. The Director of Treasuries
Government of
8. The Director of Treasuries
Government of Andhra Pradesh
Hyderabad
9. The Director of Treasuries
Government of Uttar Pradesh
Kanpur
10. The Director of Treasuries
Government of Uttaranchal
Dehradun
11. The Director of Treasuries
Government of Kerala
Thiruvananthapuram
12. The Director of Treasuries
Government of Nagaland
Kohima
13. The Director of Treasuries
Government of Arunachal Pradesh
Itanagar
14. The Director of Treasuries
Government of Manipur
Imphal
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