The Reserve Bank of India (RBI) has now allowed banks to deposit the old, decommissioned Rs 500 and Rs 1,000 notes with designated currency chests at the district level, in a post-demonetization move, in a bid to decongest the storage facility of banks that has been seeing a surge in deposits.

The central bank, in a notification on its website, said, “The scheme will be operational at Districts Head Quarters where secured storage facility will be made available for storing of Specified Bank Notes (SBNs). A currency chest operating at the place to be called Designated Chest (DC) will be required to operate a separate vault to be called Chest Cuarantee Vault (CGV) as an extended arm of it.
“Banks, preferably those not having any currency chest will deposit SBNs into it on said to contain basis in sealed boxes and will get the value of the notes to the credit of their current a/c with the chest branch. The facility will also be available to 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. Besides, expenses relating to remittance of old currency notes to RBI will also be borne by the apex bank.

The regional office of RBI will arrange evacuation of notes from the district chest on priority basis. Thereafter, notes will be subjected to detailed examination and the detection of deficiencies namely shortage, counterfeit notes, mutilated notes, etc during processing at RBI will be recovered from the chest which in turn will recover the same from the tendering bank or post office, the notification said.

This is expansion of the last week’s scheme. The central bank has decided to revive the Guarantee Scheme wherein banks can deposit the notes directly with the regional offices of RBI under whose jurisdiction they are located.