Specified Bank Notes (SBNs) - Deposit under Guarantee Scheme to decongest the storage facilities at banks

RBI/2016-17/153
DCM (Plg) No.1383/10.27.00/2016-17

November 24, 2016

The Chairman / Managing Director/Chief Executive Officer,
Public Sector Banks / Private Sector Banks / Foreign Banks / Regional Rural Banks /
Urban Co-operative Banks / State Co-operative Banks

Dear Sir,

Specified Bank Notes (SBNs) - Deposit under Guarantee Scheme to decongest the storage facilities at banks

As you are aware there is a massive accumulation of SBNs at branches of banks and currency chests putting strain on processing capacities and storage facilities. This is slowing down the deposit of accumulated SBNs into chests.

2. For resolution of the problem it is decided to revive the Guarantee Scheme to enable deposit of SBNs with RBI. The details of the scheme are as under:

1. Banks may deposit SBNs directly with the offices of RBI under whose jurisdiction they are located. These SBNs will remain, in the vaults of RBI, under the lock and key of the depositing banks till taken up for examination.

2. For the SBNs deposited by banks, RBI will afford credit to their current accounts maintained with RBI. Thereafter, if any shortage, counterfeit note, mutilated note, etc. is detected during detailed processing at RBI, the value of the same will be recovered from the bank concerned.

3. This facility will be extended to all banks and be available at all our Issue Offices.

4. To avail the facility banks need to enter into an agreement (Annex) with Regional Offices of RBI concerned.

3. The scheme is effective from November 25, 2016

4. Please acknowledge receipt.

Yours faithfully,

(P Vijaya Kumar)
Chief General Manager

Encl.

______________________________________________________________________________________

Annex – Guarantee Bond Format

The Regional Director / Chief General Manager

Reserve Bank of India

Issue Department

(Address)

Dear Sir,

In consideration of the Reserve Bank of India consenting to make an immediate payment of the value of exchange for the Legal Tender withdrawn notes in the denominations of ` 500 and ` 1000, hereafter referred to as Specified Bank Notes (SBNs) tendered by us (Name of the Bank) pending detailed examination of the tender, we (Name of the Bank) hereby agree to abide by the conditions imposed by the (Regional Director / Chief General Manager) in such cases and at once make good, without demur, any deficiency that may be found to exist in such tenders in SBNs including shortages, mutilated notes, built up notes, counterfeit notes, etc. We also authorise Reserve Bank of India to recover the shortages and other deficiencies by debit to our current account maintained with the Reserve Bank. The undertaking will remain in force until revoked by a notice in writing.

Yours faithfully,

For and on behalf of

(Name of the bank)

(Signature of the authorised official)

(Designation of the Authorised Official)

(Official ID / Seal No.)

Dated the (Date) day of (Month) (Year)