Financial Daily from THE HINDU group of publications
Thursday, Apr 03, 2003
Financial Daily from THE HINDU group of publications Thursday, Apr 03, 2003 |
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RBI & Other Central Banks Money & Banking - RBI & Other Central Banks RBI gets tough on `clean-note policy' Our Bureau
MUMBAI, April 2 THE Reserve Bank of India (RBI) has decided to get tough with banks, which do not comply with its `clean-note policy'. Though most banks have already started implementing RBI's directive, there are a few facing resistance from employees' unions. The RBI believes that the protest by a section of employees against abolition of stapling of currency notes is based on frivolous grounds. The United Forum of Bank Unions is reportedly opposing RBI's directive prohibiting stapling of currency notes. The forum wants protection to employees against loss or shortage of notes while handling unstapled currency bundles. The RBI has issued a directive under Section 35 A of the Banking Regulation Act prohibiting stapling of currency notes. According to this, stapling of currency notes thwart the very objective of providing clean notes to public and weed out the soiled notes from the system. Multiple stapling results in mutilation and causes damage to notes. It also makes it difficult for the RBI's new currency verification and processing system to sort out soiled notes. "The RBI directive is very clear. It has decided to do way with the practice of stapling currency notes. It is for the bank managements to decide how to go about it. There are several methods other than stapling to secure packed currency notes. Instead of stapling, paper or polythene bands can be used to bundle currency notes, '' said a senior RBI official. Currency bundles can be handled adequately for accuracy of count without stapling and endorsing the count. Banks can identify the branch and the employee who had counted and made a particular bundle of notes even if they are not stapled. Identification slips can be tagged to note bundles even when they are wrapped in paper or polythene bands. Most countries do not use staples for packing the currencies, said a senior bank official. The bank management should set up necessary infrastructure to handle notes safely. Electronic note counting machines can be installed at branches, said the official.
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