Financial Daily from THE HINDU group of publications
Saturday, Jan 22, 2005
Financial Daily from THE HINDU group of publications Saturday, Jan 22, 2005 |
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Money & Banking
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Financial Policy `Banks should follow global currency management norms' Our Bureau
Mangalore , Jan. 21 THE Deputy General Manager of Reserve Bank of India, Mr S.M.N. Swamy, has said that all the commercial banks should fall in line with global standards in currency management. Addressing the members of the Kanara Chamber of Commerce and Industry (KCCI) here on Thursday evening, he said that RBI came out with a `clean note policy' in 1999 in this regard. The objective of the policy is to ensure that the customers get clean currency notes in abundant quality whenever and wherever required. RBI has issued directives to the banks not to issue stapled or soiled currency notes to the customers. He urged the KCCI members to educate people on the need for clean currency notes. Stating that the Government spends around Rs 1,447 crore on printing currency notes every year, he said the lifespan of notes comes down with stapling. Nowhere in the world currency notes are stapled, he said. Banks will be penalised if they issue stapled notes. It has been made mandatory for the commercial banks to accept cut-notes and soiled notes from people and exchange them with good quality notes. However, only RBI accepts burnt and charred notes for exchange and commercial banks are not empowered to take up this activity. Glut of coins: Considering the glut of coins in Mangalore and Udupi zones, banks have been asked to accept coins from people. Mr Swamy said that decision has been taken to diversify coins from the strong rooms of bank chests in the region to other centres where the coin scarcity exists. The coins of denominations such as 1 paisa, 2 paisa, 3 paisa, 5 paisa, 10 paisa, 20 paisa - which are legal tenders - are un-current. RBI accepts such coins and sends them to mint at Hyderabad. Asking the traders to be aware of fake currency notes, he said currency notes in Mahatma Gandhi series have built-in security features. Currency notes in Ashoka series should be treated as soiled ones and handed over to banks for exchange, he said. Rs 5 notes on way out: Mr Swamy said that currency notes in the denomination of Rs 5 would be phased out soon. The Government has stopped the printing of these notes. In future, Rs 5 and Rs 10 will be made available only in the coin form as they have longer lifespan. He noted that the currency notes of the denomination of Rs 10 constituted nearly 20 per cent of the total notes printed in the country. The KCCI President, Mr A. Srinivasa Rao, presided over the meeting. The KCCI Vice-President, Capt J.P. Menezes, welcomed the gathering.
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