No more tears: RBI scraps staple diet for notes

there's good news for bank customers, fed up with torn currency notes and bruised fingers as they struggled to unstaple bill bundles. the reserve bank of india has banned banks from stapling notes, directing them to henceforth secure currency notes with paper bands. aimed at increasing the life of a note, the regulator has also asked banks to ensure that their staff don't scribble on the water mark window — the blank portion -— of currency notes. again, they have been told not to re-circulate mutilated notes. the circular issued by the rbi states that with immediate effect, banks should do away with stapling of fresh/re-issuable/non-issuable note packets, and instead secure note packets with paper bands. secondly, banks should sort notes into issuable and non-issuable ones, and issue only clean notes to the public. soiled notes have to be transferred to the rbi in an unstapled condition in inward remittances through currency chests. interestingly, the circular has been issued just a week before diwali — a period where the monetary authority sees a record demand for new currency notes. bankers are uncertain on how these measures will be implemented since no penalties have been specified... and considering that there are over 66,119 bank branches in the country. most of these branches are equipped with a huge stapler used to make bunches of 100 banknotes. it is quite usual for bank employees to staple bundles several times over the watermark to ensure that notes are not pilfered. bankers say that stapling notes is a security measure. it also gives customers a measure of confidence; once notes are stapled and the bank seal is placed over the staple, it is not possible to pilfer notes. but the flip side is that customers have to wrestle with the bundles to release currency notes which often get torn in the process. since counting machines in public sector bank branches are a very rare feature, counting of notes in most banks is done manually. to avoid duplication of work, bank cashiers often secure note bundles with a rubber band, superscribing the count on the top-most banknote. with writing on the banknotes now being banned, cashiers will have to henceforth use slips of paper to mark the count, say bankers. according to banking circles, increasing the life of banknotes has been a major area of concern for rbi and the government. the minister of state for finance told parliament earlier this year that the government has constituted a committee to look into the sole aspect of increasing the life of indian bank notes. this committee is looking into all aspects, including change in substrate from paper to plastic. while the value of money has been declining, the cost of producing the notes has been on the rise. this is partly due to the cost of raw material and also due to introduction of advanced security features on banknotes. as a result, the cost of printing high value notes is around rs 7 a piece. in avoiding the problem of soiled and mutilated notes, rbi has resorted coinisation of currency below rs 10. while coins are several times more expensive, they have an indefinite life span.

No more tears: RBI scraps staple diet for notes

<img src=/photo.cms?msid=350698003 align=left>THERE’S good news for bank customers, fed up with torn currency notes and bruised fingers as they struggled to unstaple bill bundles. The Reserve Bank of India has banned banks from stapling notes, dir...

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