RBI increases incentives for banks for distribution of coins

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On Friday, the Reserve Bank of India (RBI) increased incentives for banks for the distribution of coins to the general public from Rs 25 to Rs 65 per bag. They will also be provided with an additional incentive of Rs 10 per bag for coin distribution in semi-urban and rural areas, a notification from RBI said. This is being done to make sure that all bank branches provide better customer service to people with regard to the exchange of notes and distribution of coins, the central bank added.

As a part of their board-approved policy, the RBI has also advised the banks to enhance the engagement of their Business Correspondents (BCs) for the distribution of coins to the public and incentivise such activities

The banks may also endeavour to provide such services as part of their board-approved policy on ‘Door Step Banking’ services.

Bulk customers to get coins as business transactions

The incentive is passed on to the linked bank and branches from the community chest branch for coins distributed by them on a pro-rata basis within one week from the receipt of incentives from RBI. To meet the coin requirements of bulk customers who require more than one bag in a single transaction, banks are advised to provide coins to such customers purely for business transactions, the circular said. Coins are distributed to retail customers in small lots and not to bulk customers, at present.

Such customers should be KYC compliant constituents of the bank and the record of coins supplied should be maintained. Banks are advised to exercise due diligence to ensure that such facility is not misused, it added.