Circular No 218/2016 - Process for handling soiled / mu
SOILED NOTE - Means a note which has become dirty due to normal wear an
together wherein both the pieces presented belong to the same note and form
IF IDENTIFIED AT THE BRANCH
1) Soiled notes tendered by customers / non customers over the counter for
exchange.
Notes presented in small number:
a) Where the number of notes presented by a person is upto 20 pieces with a
maximum value of Rs. 5000/- per day, branches to exchange them over the counter
free of cost,
b) Obtain application in Form DN 1 form from the customer, in triplicate (Annexure-
1), and make note of the exchange in DN 2 register.
Notes presented in bulk:
Where the number of notes presented by a person exceeds 20 pieces or Rs. 5000/-
in value per day, branches may accept them, against receipt , for value to be credited
later,
- In such cases cash received should be parked in Accounts Payable GL and customer
payment to be made through MC / DD / NEFT / RTGS transfer
- Obtain application in Form DN 1 form from the customer, in triplicate (Annexure-1),
- Obtain duly self attested copy of Officially Valid Documents (OVDs) and PAN card
from the person tendering soiled notes for exchange (in case of a non-customer),
- Original Officially Valid Documents (OVDs) and PAN card to be sighted & the same
to be documented on the photocopy retained by the branch (in case of a
noncustomer),
- Provide a token number in the format (Running Number / Financial Year – eg :
001/2016-17 ) and write it on DN-1 form. This number is to be reset at the beginning
of the FY.
- Provide an acknowledgement to the customer (on the customer's copy) by affixing
a stamp : “Received for Collection. Date:____________”
- Update DN-2 register (Format as per Annexure 2)
- Update token number, total number of notes and aggregate face value of each DN
1 form in the DN-2 register
3) Soiled notes found in cash deposits at offsite ATMs.
A) Currency chest supported branches
- The value of the soiled notes detected in the ATM cash deposit will be credi
the Accounts Payable GL and the balance will be credited to the customer’s ac
- An intimation letter will have to be sent to the customer as per Annexure-3.
- For the soiled notes detected a DN-1 form will be prepared by annotating “r
in ATM - Cash deposit”
- The soiled notes will be sent to the Currency Chest as per details mentioned
and the customer’s account will be credited for the adjudicated value receive
Currency Chest.
- Communication letter as per Annexure-4 along with acknowledged copy of D
form duly signed by Currency Chest Staff will be sent to the customer as an ad
the soiled notes received.
- FLEXCUBE ENTRIES
- On receipt of soiled notes in offsite ATM cash deposits
> Cr Accounts Payable GL # 290701263 using FC option 1460 (misc GL credit
Narration: Soiled Note collected DN-1 No <Token No>
- While offloading cash to Currency Chest
> Dr Branch dummy ………………….…A/c using FC option 1001 (cash wdl)
Narration: Soiled Note remitted to CC Dt. <From> - <To>
- On adjudication of actual value
> Dr Accounts Payable GL # 290701263 using FC option 1408 (misc cust cred
> Cr Cash shortages Currency chest a/c for shortage (Face Value- Adjudicated
Narration: Soiled Note collected DN-1 No <Token No>
to be documented on the photocopy retained by the branch (in case of a
noncustomer),
- Provide a token number in the format (Running Number / Financial Year – eg :
001/2016-17 ) and write it on DN-1 form. This number is to be reset at the beginning
of the FY.
- Provide an acknowledgement to the customer (on the customer's copy) by affixing
a stamp : “Received for Collection. Date:____________”
- Update DN-2 register (Format as per Annexure 2)
- Update token number, total number of notes and aggregate face value of each DN
1 form in the DN-2 register
- The soiled notes to be sent to mapped Currency Chest on the next visit scheduled
- While sending cash to currency chest, branch to update DN 2 register with ‘Date of
remittance to Currency Chest’
- Soiled notes to be sent to Currency Chest along with the DN-1 form/s,
- On receipt of soiled notes from branches, Currency Chest would credit the Branch
dummy A/c for entire value of soiled notes. The credit would be affected latest by
the next working day and may result in an overnight TOD in Branch Dummy A/c,
- On adjudication, Currency Chest will send on email, the scan copy of DN-1 form
mentioning adjudicated value of individual note duly signed by Currency Chest Staff
and mention the loss (i.e. Face Value less Adjudicated Value) to be credited to
Currency Chest Shortage account,
- Credit to currency chest shortage account by Branch has to be posted within T+2
days,
- Branch would make payment to customer for balance amount in Accounts payable
(Face Value – Shortage), and as an advice to the tenderer of soiled notes, branch will
provide copy of DN1 form provided by Currency Chest.
FLEXCUBE ENTRIES
- On acceptance of soiled notes from the customer:
> Cr Accounts Payable GL # 290701263 (for Face Value) using FC option 1460 (misc
GL credit)
Narration: Soiled Note collected DN-1 No <Token No>
- While sending cash to currency chest:
> Dr Branch Dummy A/c (for Face Value) using FC option 1001 (cash wdl)
Narration: Soiled Note remitted to CC Dt. <From> - <To>
- On receipt of the mail intimation regarding adjudication from Currency Chest:
> Dr Accounts Payable GL # 290701263 using FC option 1408 (misc cust credit)
> Cr Cash shortages Currency chest account
Narration: Soiled Note collected DN-1 No <Token No>
- On payment of adjudicated value to the customer:
i. Payment by cash
> Dr Accounts Payable GL # 290701263 using FC option 1060 (misc GL debit)
Narration: Soiled Note collected DN-1 No <Token No>
ii. Credit to account (For Account holders)
> Dr Accounts Payable GL # 290701263 using FC option 1408 (misc cust credit)
> Cr CASA account of Customer
Narration: Soiled Note collected DN-1 No <Token No>
iii. MC / DD / NEFT payment
> Dr Accounts Payable GL # 290701263
(Issue MC / DD or process NEFT favoring the customer basis details mentioned on DN
1 Form)
- While offloading cash to Currency Chest
> Dr Branch dummy ………………….…A/c using FC option 1001 (cash wdl)
Narration: Soiled Note remitted to CC Dt. <From> - <To>
- On adjudication of actual value
> Dr Accounts Payable GL # 290701263 using FC option 1408 (misc cust cred
> Cr Cash shortages Currency chest a/c for shortage (Face Value- Adjudicated
Narration: Soiled Note collected DN-1 No <Token No>
- The balance amount (adjudicated value) to be credited to customer’s a/c
> Dr Accounts Payable GL # 290701263 using FC option 1408 (misc cust cred
> Cr CASA account of customer
Narration: Soiled Note collected DN-1 No <Token No>
B) Branches not supported by Currency chest
- The value of the soiled notes detected in the ATM cash deposit will be credit
the Accounts Payable GL and the balance will be credited to the customer’s ac
- An intimation letter will have to be sent to the customer as per Annexure-3.
- For the soiled notes detected a DN-1 form will be prepared by annotating “r
in ATM Cash deposit”.
- The soiled notes would be exchanged with other bank chest / other banks. O
receipt of credit from other bank the customer’s account will be credited for t
adjudicated value received from other bank currency chest / other banks.
- Communication letter as per Annexure-4 along with credit advice received fr
other bank will be sent to the customer as an advice for the soiled notes recei
- FLEXCUBE ENTRIES
- On receipt of soiled notes in offsite ATM cash deposits
> Cr Accounts Payable GL # 290701263 using FC option 1460 (misc GL credit
Narration: Soiled Note collected DN-1 No <Token No>
- While offloading cash to other Bank / Currency chest of other bank
> Dr Branch dummy a/c using FC option 1001 (cash wdl)
Narration: Soiled Note remitted to Bank Name DT <From> - <To>
- On receipt of adjudicated value from other Bank
> Cr Branch dummy a/c using FC option 1401
Narration: Soiled Note collected DN-1 No <Token No>
- For shortage (Face Value- Adjudicated Value)
> Dr Accounts Payable GL # 290701263 using FC option 1408 (misc cust cred
> Cr Branch dummy a/c
Narration: Soiled note collected DN-1 No <Token No>
- The balance amount (adjudicated value) to be credited to customer's a/c
> Dr Accounts Payable GL # 290701263 using FC option 1408 (misc cust cred
> Cr CASA account of Customer
Narration: Soiled Note collected DN-1 No <Token No>
ii. Credit to account (For Account holders) - The balance amount (adjudicated value) to be credited to customer's a/c
> Dr Accounts Payable GL # 290701263 using FC option 1408 (misc cust credit) > Dr Accounts Payable GL # 290701263 using FC option 1408 (misc cust cred
> Cr CASA account of Customer > Cr CASA account of Customer
Narration: Soiled Note collected DN-1 No <Token No> Narration: Soiled Note collected DN-1 No <Token No>
iii. MC / DD / NEFT payment
> Dr Accounts Payable GL # 290701263
(Issue MC / DD or process NEFT favoring the customer basis details mentioned on DN
1 Form)

Updated on: 23rd Dec 2016

2) Soiled notes deposited by Collection executives.

- In case soilednotes are found in the cash deposited by collections executives, it
would be returned back to the executive for exchange.
- In case the Collection executive wants to exchange the soiled note, the same will
have to be deposited through a DN-1 form (as per process mentioned in section 1)
 ndling soiled / mutilated / imperfect notes by branches

dirty due to normal wear and tear and also includes a two piece note pasted
g to the same note and form the entire note with no essential feature missing.

IF IDENTIFIED AT CURRENCY CHEST

e ATMs.
ATM cash deposit will be credited in
e credited to the customer’s account.
e customer as per Annexure-3.
ll be prepared by annotating “received
Chest as per details mentioned above
r the adjudicated value received from
g with acknowledged copy of DN-1
e sent to the customer as an advice for
- The currency chest initially gives credit to the branch dummy for the entire
amount remitted and then sorts the cash.
- In case of any soiled note detected while sorting, the currency chest would
ascertain the actual value of each note.
- In case of half / nil value notes, currency chest will book the shortage by debiting
their cash shortage account.
- Currency chest will not return the adjudicated notes to the branch. Only a mail intimation
will be sent.
- FLEXCUBE ENTRIES
> Dr Teller cash shortage GL # 390202703 using FC option 1408 (misc GL debit)
Narration: SN-Branch Name- Denomination x No of pieces

- In case the shortage can be recovered from the customer then the below entry is to be
posted
deposits > Dr CASA (of the customer) using FC option 1008 (misc cust debit)
FC option 1460 (misc GL credit) > Cr Teller cash shortage GL # 390202703
n No> Narration: Recovery SN – BR Name - Denomination x No of pieces

- In case the branch is not able to recover the amount from the customer or customer
FC option 1001 (cash wdl) cannot be identified , the amount parked in teller shortage will have to be taken up for
m> - <To> write-off after a period of 3 months.

FC option 1408 (misc cust credit)

ortage (Face Value- Adjudicated Value)
n No>
 Narration: Recovery SN – BR Name - Denomination x No of pieces

- In case the branch is not able to recover the amount from the customer or customer
FC option 1001 (cash wdl) cannot be identified , the amount parked in teller shortage will have to be taken up for
m> - <To> write-off after a period of 3 months.

FC option 1408 (misc cust credit)

ortage (Face Value- Adjudicated Value)
n No>

e credited to customer’s a/c

FC option 1408 (misc cust credit)

n No>

ATM cash deposit will be credited in

e credited to the customer’s account.
e customer as per Annexure-3.
ll be prepared by annotating “received

her bank chest / other banks. On

’s account will be credited for the
rrency chest / other banks.
g with credit advice received from
dvice for the soiled notes received.

deposits
FC option 1460 (misc GL credit)
n No>
cy chest of other bank
(cash wdl)
DT <From> - <To>

ank

n No>

FC option 1408 (misc cust credit)

n No>

e credited to customer's a/c

FC option 1408 (misc cust credit)

n No>
e credited to customer's a/c
FC option 1408 (misc cust credit)

n No>
 Circular No 218/2016 - Process for handling soiled / mu
MUTILATED NOTE - It is a currency note which has a portion missing or whic
IF IDENTIFIED AT THE BRANCH
1) Mutilated notes tendered by customers / non customers over the counter for
exchange.
Notes presented in small number:
a) Where the number of notes presented by a person is upto 20 pieces with a
maximum value of Rs. 5000/- per day, branches to exchange them over the counter
free of cost,
b) Obtain application in Form DN 1 form from the customer, in triplicate (Annexure-
1), and make note of the exchange in DN 2 register.
Notes presented in bulk:
Where the number of notes presented by a person exceeds 20 pieces or Rs. 5000/-
in value per day, branches may accept them, against receipt , for value to be credited
later,
- In such cases cash received should be parked in Accounts Payable GL and customer
payment to be made through MC / DD / NEFT / RTGS transfer
- Obtain application in Form DN 1 form from the customer, in triplicate (Annexure-1),
- Obtain duly self attested copy of Officially Valid Documents (OVDs) and PAN card
from the person tendering soiled notes for exchange (in case of a non-customer),
- Original Officially Valid Documents (OVDs) and PAN card to be sighted & the same
to be documented on the photocopy retained by the branch (in case of a
noncustomer),
- Provide a token number in the format (Running Number / Financial Year – eg :
001/2016-17 ) and write it on DN-1 form. This number is to be reset at the beginning
of the FY.
- Provide an acknowledgement to the customer (on the customer's copy) by affixing
a stamp : “Received for Collection. Date:____________”
- Update DN-2 register (Format as per Annexure 2)
- Update token number, total number of notes and aggregate face value of each DN
1 form in the DN-2 register
- The mutilated notes to be sent to mapped Currency Chest on the next visit
3) Mutilated notes found in cash deposits at offsite ATMs.
A) Currency chest supported branches
- The value of the mutilated notes detected in the ATM cash deposit will be c
in the Accounts Payable GL and the balance will be credited to the customer’s
account.
- An intimation letter will have to be sent to the customer as per Annexure-3
- For the mutilated notes detected a DN-1 form will be prepared by annotatin
“received in ATM - Cash deposit”
- The mutilated notes will be sent to the Currency Chest as per details mentio
above and the customer’s account will be credited for the adjudicated value
from Currency Chest.
- Communication letter as per Annexure-4 along with acknowledged copy of D
form duly signed by Currency Chest Staff will be sent to the customer as an ad
the mutilated notes received.
- FLEXCUBE ENTRIES
- On receipt of Mutilated notes in offsite ATM cash deposits
> Cr Accounts Payable GL # 290701263 using FC option 1460 (misc GL credit
Narration: Mutilated Note collected DN-1 No <Token No>
- While offloading cash to Currency Chest
> Dr Branch dummy ………………….…A/c using FC option 1001 (cash wdl)
Narration: Mutilated Note remitted to CC Dt. <From> - <To>
- On adjudication of actual value
> Dr Accounts Payable GL # 290701263 using FC option 1408 (misc cust cred
> Cr Cash shortages Currency chest a/c for shortage (Face Value- Adjudicate
Narration: Mutilated Note collected DN-1 No <Token No>
noncustomer),
- Provide a token number in the format (Running Number / Financial Year – eg :
001/2016-17 ) and write it on DN-1 form. This number is to be reset at the beginning
of the FY.
- Provide an acknowledgement to the customer (on the customer's copy) by affixing
a stamp : “Received for Collection. Date:____________”
- Update DN-2 register (Format as per Annexure 2)
- Update token number, total number of notes and aggregate face value of each DN
1 form in the DN-2 register
- The mutilated notes to be sent to mapped Currency Chest on the next visit
scheduled
- While sending cash to currency chest, branch to update DN 2 register with ‘Date of
remittance to Currency Chest’
- Mutilated notes to be sent to Currency Chest along with the DN-1 form/s,
- On receipt of mutilated notes from branches, Currency Chest would credit the
Branch dummy A/c for entire value of mutilated notes. The credit would be affected
latest by the next working day and may result in an overnight TOD in Branch Dummy
A/c,
- On adjudication, Currency Chest will send on email, the scan copy of DN-1 form
mentioning adjudicated value of individual note duly signed by Currency Chest Staff
and mention the loss (i.e. Face Value less Adjudicated Value) to be credited to
Currency Chest Shortage account,
- Credit to currency chest shortage account by Branch has to be posted within T+2
days,
- Branch would make payment to customer for balance amount in Accounts payable
(Face Value – Shortage), and as an advice to the tenderer of mutilated notes, branch
will provide copy of DN1 form provided by Currency Chest.
FLEXCUBE ENTRIES
- On acceptance of mutilated notes from the customer:
> Cr Accounts Payable GL # 290701263 (for Face Value) using FC option 1460 (misc
GL credit)
Narration: Mutilated Note collected DN-1 No <Token No>
- While sending cash to currency chest:
> Dr Branch Dummy A/c (for Face Value) using FC option 1001 (cash wdl)
Narration: Mutilated Note remitted to CC Dt. <From> - <To>
- On receipt of the mail intimation regarding adjudication from Currency Chest:
> Dr Accounts Payable GL # 290701263 using FC option 1408 (misc cust credit)
> Cr Cash shortages Currency chest account
Narration: Mutilated Note collected DN-1 No <Token No>
- On payment of adjudicated value to the customer:
i. Payment by cash
> Dr Accounts Payable GL # 290701263 using FC option 1060 (misc GL debit)
Narration: Mutilated Note collected DN-1 No <Token No>
ii. Credit to account (For Account holders)
> Dr Accounts Payable GL # 290701263 using FC option 1408 (misc cust credit)
> Cr CASA account of Customer
Narration: Mutilated Note collected DN-1 No <Token No>
iii. MC / DD / NEFT payment
> Dr Accounts Payable GL # 290701263
(Issue MC / DD or process NEFT favoring the customer basis details mentioned on DN
1 Form)
- While offloading cash to Currency Chest
> Dr Branch dummy ………………….…A/c using FC option 1001 (cash wdl)
Narration: Mutilated Note remitted to CC Dt. <From> - <To>
- On adjudication of actual value
> Dr Accounts Payable GL # 290701263 using FC option 1408 (misc cust cred
> Cr Cash shortages Currency chest a/c for shortage (Face Value- Adjudicate
Narration: Mutilated Note collected DN-1 No <Token No>
- The balance amount (adjudicated value) to be credited to customer’s a/c
> Dr Accounts Payable GL # 290701263 using FC option 1408 (misc cust cred
> Cr CASA account of customer
Narration: Mutilated Note collected DN-1 No <Token No>
B) Branches not supported by Currency chest
- The value of the mutilated notes detected in the ATM cash deposit will be cr
in the Accounts Payable GL and the balance will be credited to the customer’s
account.
- An intimation letter will have to be sent to the customer as per Annexure-3
- For the mutilated notes detected a DN-1 form will be prepared by annotatin
“received in ATM Cash deposit”.
- The mutilated notes would be exchanged with other bank chest / other ban
receipt of credit from other bank the customer’s account will be credited for t
adjudicated value received from other bank currency chest / other banks.
- Communication letter as per Annexure-4 along with credit advice received f
other bank will be sent to the customer as an advice for the mutilated notes r
- FLEXCUBE ENTRIES
- On receipt of mutilated notes in offsite ATM cash deposits
> Cr Accounts Payable GL # 290701263 using FC option 1460 (misc GL credit
Narration: Mutilated Note collected DN-1 No <Token No>
- While offloading cash to other Bank / Currency chest of other bank
> Dr Branch dummy a/c using FC option 1001 (cash wdl)
Narration: Mutilated Note remitted to Bank Name DT <From> - <To>
- On receipt of adjudicated value from other Bank
> Cr Branch dummy a/c using FC option 1401
Narration: Mutilated Note collected DN-1 No <Token No>
- For shortage (Face Value- Adjudicated Value)
> Dr Accounts Payable GL # 290701263 using FC option 1408 (misc cust cred
> Cr Branch dummy a/c
Narration: Mutilated note collected DN-1 No <Token No>
- The balance amount (adjudicated value) to be credited to customer's a/c
> Dr Accounts Payable GL # 290701263 using FC option 1408 (misc cust cred
> Cr CASA account of Customer
Narration: Mutilated Note collected DN-1 No <Token No>
Narration: Mutilated Note collected DN-1 No <Token No> - The balance amount (adjudicated value) to be credited to customer's a/c
ii. Credit to account (For Account holders) > Dr Accounts Payable GL # 290701263 using FC option 1408 (misc cust cred
> Dr Accounts Payable GL # 290701263 using FC option 1408 (misc cust credit) > Cr CASA account of Customer
> Cr CASA account of Customer Narration: Mutilated Note collected DN-1 No <Token No>
Narration: Mutilated Note collected DN-1 No <Token No>
iii. MC / DD / NEFT payment
> Dr Accounts Payable GL # 290701263
(Issue MC / DD or process NEFT favoring the customer basis details mentioned on DN
1 Form)

2) Mutilated notes deposited by Collection executives.

- In case mutilated notes are found in the cash deposited by collections executives,
it would be returned back to the executive for exchange.
- In case the Collection executive wants to exchange the mutilated note, the same
will have to be deposited through a DN-1 form (as per process mentioned in section
1)
 ndling soiled / mutilated / imperfect notes by branches
has a portion missing or which is made up of more than two pieces
ffsite ATMs.
the ATM cash deposit will be credited
ll be credited to the customer’s
e customer as per Annexure-3.
m will be prepared by annotating
ncy Chest as per details mentioned
dited for the adjudicated value received
ng with acknowledged copy of DN-1
e sent to the customer as an advice for
ash deposits
FC option 1460 (misc GL credit)
Token No>
FC option 1001 (cash wdl)
From> - <To>
FC option 1408 (misc cust credit)
ortage (Face Value- Adjudicated Value)
Token No>
IF IDENTIFIED AT CURRENCY CHEST
- The currency chest initially gives credit to the branch dummy for the entire
amount remitted and then sorts the cash.
- In case of any mutilated note detected while sorting, the currency chest would
ascertain the actual value of each note.
- In case of half / nil value notes, currency chest will book the shortage by debiting
their cash shortage account.
- Currency chest will not return the adjudicated notes to the branch. Only a mail intimation
will be sent.
- FLEXCUBE ENTRIES
> Dr Teller cash shortage GL # 390202703 using FC option 1408 (misc GL debit)
Narration: MN-Branch Name- Denomination x No of pieces
- In case the shortage can be recovered from the customer then the below entry is to be
posted
> Dr CASA (of the customer) using FC option 1008 (misc cust debit)
> Cr Teller cash shortage GL # 390202703
Narration: Recovery MN – BR Name - Denomination x No of pieces
- In case the branch is not able to recover the amount from the customer or customer
cannot be identified , the amount parked in teller shortage will have to be taken up for
write-off after a period of 3 months.
 - In case the branch is not able to recover the amount from the customer or customer
FC option 1001 (cash wdl) cannot be identified , the amount parked in teller shortage will have to be taken up for
From> - <To> write-off after a period of 3 months.

FC option 1408 (misc cust credit)

ortage (Face Value- Adjudicated Value)
Token No>

e credited to customer’s a/c

FC option 1408 (misc cust credit)

Token No>

the ATM cash deposit will be credited

ll be credited to the customer’s

e customer as per Annexure-3.

m will be prepared by annotating

h other bank chest / other banks. On

’s account will be credited for the
rrency chest / other banks.
ng with credit advice received from
advice for the mutilated notes received.

cash deposits
FC option 1460 (misc GL credit)
Token No>

cy chest of other bank

(cash wdl)
me DT <From> - <To>

ank

Token No>

FC option 1408 (misc cust credit)

Token No>

e credited to customer's a/c

FC option 1408 (misc cust credit)

Token No>
e credited to customer's a/c
FC option 1408 (misc cust credit)

Token No>