Mumbai: The Reserve Bank of India (RBI) on Tuesday directed banks to ensure that at least 40 per cent of the currency notes are supplied to rural areas as bank notes, being supplied to rural areas, at present, are not commensurate with the requirements of the rural population.
The Reserve Bank has also asked banks to ensure that the notes supplied to rural areas are in denomination of Rs 500 and Rs 100.
“Banks should advise their currency chests to step up issuance of fresh notes to rural branches of regional rural banks (RRBs), district Cooperative Central Bank (DCCBs) and commercial banks, white label ATMs in rural areas and post offices in rural areas on priority basis which are considered main rural channels of distribution,” Reserve Bank of India said.
The allocation of notes to rural areas according to Reserve Bank should be made in proportion to the district level current and savings account data after sorting out the rural and urban mix in every district.
“Accordingly, all chests operating in a district must issue bank notes to the above mentioned distribution channels in the indicated proportion.
“The indicated proportion may be maintained on weekly average basis at each chest level as it may be difficult to stick to the proportion on daily basis,” RBI said in its notification.
Among various categories of ATM’s, banks have been advised to allocate higher proportion of cash to off-site ATM’s, as they are more important in last mile currency connectivity.
