RBI allows banks to deposit Rs 500, Rs 1,000 notes in district chests

Mumbai: The Reserve Bank of India (RBI) has allowed lenders to park old 500 and 1,000 rupee currency notes in currency chests at the district level in view of mounting deposits due to the ongoing domonetisation drive.

In a statement, the RBI said a currency chest operating at the point to be called Designated Chest -DC will be required to operate a separate vault -- to be named Chest Guarantee Vault CGV as an extended arm of it.

In its notification, the RBI said banks not having a currency chest will deposit such notes in sealed boxes and will get the value of the notes to the credit of their current account with the chest branch.

The RBI notification also said that the facility will also be available at post offices if they are maintaining current account with the chest branch managing CGV. RBI also said expenses relating to round-the-clock guarding will be borne by the central bank, if necessary.

Expenses relating to remittance of old currency notes to the RBI will also be borne by the central bank. Old currency notes will be evacuated from district chests by the regional offices of the RBI.

The RBI has also asked banks to be cash-ready for pensioners and armed forces in the wake of limited currencies in the market following cancellation of Rs 500 and Rs 1,000 notes as demand for cash from government officials and pensioners is expected after electronic payment of their salary or pension.

Banks have been asked to make cash available at military outposts as well.