Economy

RBI tells banks to ensure 40% of cash supply reaches rural areas

The bank notes dispatched to rural bank branches are not in proportion with the population, the Reserve Bank of India has observed. File photo.

The bank notes dispatched to rural bank branches are not in proportion with the population, the Reserve Bank of India has observed. File photo.   | Photo Credit: Kommuri Srinivas

Currency chests, ATM should have Rs 500 denomination notes and below

The Reserve Bank of India has directed banks to ensure that at least 40 per cent of the supply of bank notes should reach rural areas while currency chests and automated teller machines in such areas should have ₹500 and ₹100 denomination bank notes.

The banking regulator has observed that “bank notes, being supplied to rural areas, at present, are not commensurate with the requirements of rural population.”

In a circular, RBI said banks should advise their currency chests to step up issuance of fresh notes to rural branches of Regional Rural Banks, District Central Cooperative Banks and commercial banks, White Label ATMs in rural areas and post offices in rural areas on a priority basis.

Of the 4,000 odd currency chests in the country, most of them are managed by public sector banks. “Chests should issue bank notes in denominations of ₹500 and below. In particular ATMs, including white label, may be issued ₹500s and ₹100s and among ATMs category, Off-site ATMs should be allocated higher proportion of cash as against on site ATMs as they are more important in last mile currency connectivity,” according to the circular.

The central bank further added that chests operating in a district should maintain the on weekly average basis.

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Printable version | Jul 9, 2020 3:10:16 AM | https://www.thehindu.com/business/Economy/article16982398.ece

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