RBI asks banks to supply at least 40% of currency to rural areas

The basic reason behind taking this decision was the unavailability of sufficient cash to supply to fulfill the requirement, as stated by the RBI.

By: News Desk |
January 3, 2017 2:29 pm

The Reserve Bank of India (RBI), on December 3, issued guidelines to ensure that at least 40% of the bank notes should be supplied to the rural areas. The RBI advised the banks to increase the supply of fresh notes and the currency chests were directed to step up for the issuance of fresh notes to the rural bank branches situated far off.

The basic reason behind taking this decision was the unavailability of sufficient cash to supply which could fulfill the requirement, as stated by the RBI.

“Banks should advise their currency chests to step up issuance of fresh notes to rural branches of RRBs, DCCBs and commercial banks, White Label ATMs in rural areas and post offices in rural areas on a priority basis which are considered main rural channels of distribution,” RBI said in a circular.

Banks should advise their currency chests to step up issuance of fresh notes to rural branches of RRBs, DCCBs and commercial banks.(ctd)-RBI

— ANI (@ANI_news) January 3, 2017

.., White Label ATMs in rural areas&post offices in rural areas on priority basis which r considered main rural channels of distribution-RBI

— ANI (@ANI_news) January 3, 2017

The RBI also advised other banks to go for a need based working approach as the cash demand in rural areas might vary depending on the number of saving accounts present in each district plus the share of CASA deposits.

The currency chests have also been asked by the regulator to provide daily issuance of notes to connect offices who will be reporting to RBI regional office.