What changed
This master circular consolidates and supersedes all prior instructions on penal interest for currency chest reporting. It sets a minimum transaction threshold of ₹1 lakh (in multiples of ₹50,000) and strict same-day reporting deadlines. No maximum penal interest is stipulated, ensuring recovery in all applicable cases.
What it means for you
Banks with currency chests face immediate financial penalties for reporting lapses, with interest accruing from the transaction date. The absence of a penal interest cap increases compliance risk, especially for high-value or frequent errors. Link offices bear responsibility for accurate consolidation, and wrong reporting in link statements triggers penalties even if chest slips are correct.
What you must do
- Ensure all currency chest transactions are reported via ICCOMS by 9 PM on the same day, with link offices submitting consolidated data by 11 PM.
- Train staff on correct transaction classification, especially avoiding reporting fresh note remittances as deposits.
- Implement internal checks to prevent wrong reporting in link office statements, as penalties apply regardless of chest slip accuracy.
- Monitor reporting timelines strictly; request case-by-case relaxation only during verified strike situations.
Who it affects
All banks operating currency chests, Link offices consolidating chest transaction reports, Sub-Treasury Offices reporting directly to RBI Issue Offices, State Government treasuries (as per enclosed list)
What is the minimum transaction amount that must be reported?
Deposits into or withdrawals from a currency chest must be at least ₹1,00,000, and thereafter in multiples of ₹50,000.
When does penal interest start accruing for delayed reporting?
Penal interest is calculated on a T+0 basis, meaning it applies if the link office does not report to the Issue Office by 11 PM on the same business day.
Is there a maximum limit on penal interest?
No, there is no maximum amount; penal interest is recovered in all applicable cases, rounded to the nearest rupee.