Sunday, July 24, 2016

Penal Interest for Delayed /Wrong /Non-Reporting of Currency Chest Transactions



Reporting of Currency Chest Transactions
The minimum amount of deposit /withdrawal from currency chest will be Rs.1,00,000/- and thereafter, in multiples of Rs.50,000/-.

Time limit for Reporting
The currency chests should report all transactions through ICCOMS on the same day by 9 PM to their respective link offices. Link offices should report the consolidated position to the Issue Offices by 11 PM on the same day.

The Sub-Treasury Offices (STOs) should report all transactions directly to the Issue Office of the Reserve Bank by 11 PM on the same day.

Relaxation in respect of strike period in banks
Relaxation will be considered on case-to-case basis.

Levy of penal interest for delays
In the event of delay, penal interest will be levied on the amount due for the period of delay. Penal interest will be calculated on T+0 basis i.e. on transactions not reported by 11 PM on the same business day. However, Reserve Bank may grant grace period.

Penal interest will also be charged for delay in submission of chest slips in the case of single chest / STOs directly linked to Issue Department of the circle.

Wrong reporting and levy of penal interest
Penal interest will be levied in cases of wrong reporting in the same manner till the date of receipt of correct advice. Debits/credits to banks' current accounts are raised on the basis of the figures reported in the Link Office Statements. Penal interest will be levied in all cases of wrong reporting in the Statements even if the reporting was done correctly in the chest slips. Remittances of fresh notes/notes to the currency chests are not to be reported as 'deposit' transactions in the Link Office Statements.

Reporting of Soiled note remittances to RBI / diversion to other chests
In case soiled note remittances to RBI or diversion to other currency chests are shown as withdrawals then a penalty of Rs.50,000/- will be levied.

Reporting of diversions in ICCOMS
The chest receiving the diversion should report under 2 A and the remitting chest should report under 4A in the chest slip immediatly.

Maximum penal interest to be charged
There is no stipulation regarding the maximum amount of penal interest leviable.

Penal interest for inclusion of ineligible amounts in the currency chest balances

Penal interest will be levied in all cases where the bank has enjoyed 'ineligible' credit in its current account with RBI on account of wrong, delayed or non-reporting of transactions. Penal measures will also be taken in cases of shortages in chest balances or remittances, shortages due to pilferage or frauds, counterfeit banknotes as per the prevailing “scheme of Penalties”.

Cash kept for safe custody is not eligible for being included in the chest balances. If such amounts are included in the chest balances, these will be treated as instances of wrong reporting.

In all the above cases penal interest will be levied from the date of inclusion in chest balances till the exclusion of such amounts from chest balances. Excepting shortages in chest balances / remittances, shortages due to pilferage / frauds, counterfeit banknotes detected in chest balances / remittances where the penal measures will be taken on the basis of prevailing “scheme of Penalties”.

Rate of penal interest

Penal interest shall be levied at 2% over the prevailing Bank Rate.

Levy of penal interest in respect of currency chests at treasuries

The above instructions shall be applicable to currency chests at treasury/sub-treasury offices also.

Representations

Representations on account of genuine difficulties, may be made to the Issue Office through the Controlling office of the bank within a month from the date of debit.

In the case of wrong reporting representations for waiver will not be considered.  

Requests by banks for waiver of penal interest on grounds that delayed/wrong/non-reporting did not result in
·       Utilization of the Reserve Bank's funds or
·       Shortfall in the maintenance of CRR/SLR or
·       They were the result of clerical mistakes, unintentional or arithmetical errors,
·       First time error,
·       Inexperience of staff etc.,
will not be considered as valid grounds for waiver of penal interest. Further, RBI will take a serious view of all such lapses.
Based on RBI Master Directions dated 20/07/2016. For further clarifications, Please refer www.rbi.org.in ………… Poppy