Banks should supply 40% notes of Rs 500 or less to rural areas: RBI

1. Banks should supply 40% notes in lower denomination to rural areas: RBI Special Weekend News - The Reserve Bank of India (RBI) on Tuesday instructed banks to ensure that at least 40 per cent of bank notes are supplied to rural areas, in denomination of Rs 500 or below, as the notes being supplied to rural areas "are not commensurate with the requirements of rural population". Banks maintaining currency chests should step up issuance of fresh notes to rural branches of regional rural banks, district co-operative banks, other commercial banks, white label ATMs (WLAOs) and post offices in rural areas on priority basis. The distribution can be worked out by checking district level current and savings account data, sorting out rural and urban mix in every district.

2. "Accordingly, all chests operating in a district must issue bank notes to the above mentioned distribution channels in the indicated proportion," RBI said in its notification on its website. "In particular ATMs, including WLAOs, may be issued Rs 500 and Rs 100 notes and among ATMs category, Off-site ATMs should be allocated higher proportion of cash as against on site ATMs as they are more important in last mile currency connectivity," RBI said. "Existing stock of other denominations notes below Rs 100 should be issued liberally," the notification said, adding, banks should indent for coins, obtain supply from the issue department of RBI if required, and ensure supply to public on priority basis. Get Updated On – Breaking News & Market News | Business Standard