Electronic Banking

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 This module focuses on
• Cash
• Cash with banks
• Cash in hand
• Coins
• Notes
• Exchange of Notes and Coins
• Mutilated/ soiled notes
• Defectively printed notes
• Forged Notes
• Dual Custody
• Currency chest
• Clean note policy
• Acceptance of cash over the counter
 Cash
• Cash is money held in the form of currency
notes or in coins or in accounts with other
banks that are available on demand or after
giving notice.
• Banks hold cash in 2 forms:
– Cash with banks; and
– Cash in hand
 Cash with banks

• Banks keep cash or balances with:

– Reserve Bank of India to maintain reserves and
meet interbank transactions
– Other commercial banks for business
requirements.
 Cash in hand
• Kept to meet day to day needs.
• Amount will vary from branch to branch as
needs vary
• As no interest is earned these amount kept
will be very little.
• This money is in the form of coins and notes
 Coins
• Coins are in denominations of Rs. 10, Rs. 5, Rs.
2, Re 1 and 50 paise.
• Banks must accept coins as they are legal
tender.
• Small coins in large quantities may be taken by
weight.
 Notes
• Currency notes are available in denominations
of Rs. 1000, Rs. 500, Rs. 100, Rs. 50, Rs. 20 and
Rs. 10
• Notes must not be stapled.
• Notes must not be written on
• Banks should sort our notes into reissuable
notes and non issuable notes.
 Display

• Banks must display a board at their branches

with the legend MUTILATED NOTES ARE
ACCEPTED AND EXCHANGED.
 Facility for exchange
• All branches should:
• Provide customers fresh/ good quality notes
and coins.
• Exchange soiled notes
• Accept notes and coins for transactions
 Remittance of Rs. 50,000 and
above
• Renittance of Rs. 50,000 and above must be
effected by debit to the customer’s account or
against cheques and not against cash
payment.
 Mutilated/ Soiled Notes
• Banks should accept mutilated notes if all the
relevant details are on the notes.
• Banks should exchange soiled notes
 Defectively printed notes
• Defectively printed notes should be replaced
 Notes
• Forged notes should be impounded and sent
to the Reserve Bank.
• The police must be informed.
 Dual custody
• The vault where the cash is kept should be
under dual control.
• Controls on cash must be very strong.
 Currency Chest
• Select branches of banks are authorised to
establish currency chests.
• These branches are expected to distribute
bank notes and rupee coins tp other bank
branches in their area of operation
 Clean note policy
• To ensure longer life for notes, Reserve Bank
has asked banks not to:
• Staple notes
• Store bank notes safely to prevent any
damage.
• Sort notes between re issuable and non re
issuable notes.
 Acceptance of cash over counter
• All branches of banks must accept cash over
the counters from their customers
• Banks cannot introduce products where
customers are not permitted to deposit cash
over the counters
• Banks must not incorporate clauses that
restrict deposit of cash over the counters.