As per the draft letter of offer filed with SEBI, State Bank of Mysore will raise Rs.600 crore from rights issue to augment its capital base. Under the offer, more equity will be offered to the existing shareholders. State Bank of India holds over 92% equity in State Bank of Mysore.
Source: http://www.business-standard.com/india/news/state-bankmysore-to-raise-rs-600-cr-via-rights/81940/on
STATE BANK OF MYSORE TO RAISE RS.600 CRORE VIA RIGHTS
UNITED BANK OF INDIA FILES DRHP WITH SEBI
United Bank of India filed a Draft Red Herring Prospectus (DRHP) with SEBI for its Initial Public Offer (IPO). The bank proposes to issue 5 crore equity shares with a face value of Rs.10 each at a premium that would be decided by the merchant bankers. However, Mr. S.C. Gupta, Chairman and Managing Director, United Bank of India has said that the minimum premium could be Rs.60 per share over a face value of Rs.10 each based on the book value of Rs.104/- after recasting the capital.
Earlier the Government allowed the bank to recast its capital and reduce the paid-up component to Rs.266 crore from Rs.1532 crore as a precursor to the IPO exercise.
Source: http://www.business-standard.com/india/news/united-bank-files-drhpsebi/81937/on
CREDIT OFFTAKE REMAINS SUBDUED AT 11% IN 2009
As per the data released by Reserve Bank of India, the credit offtake remained subdued at 11% during the one year period ending December 18, compared to 24% during 2008, indicating the economic activity to fully pick up momentum. The banking credit during the year showed an increase of Rs.2.92 lakh crore, down from Rs.5.12 lakh crore in the previous year.
However, analysts feel that credit offtake should rise in the remaining months of the current fiscal, with a pcik up in economic activities.
Source: http://www.business-standard.com/india/news/credit-offtake-remains-subdued-at-11-in-2009/81935/on
CORPORATION BANK INCREASES AUTHORISED CAPITAL
Government of India has increased the authorised capital of Corporation Bank from the existing level of Rs.1500 crore to Rs.3000 crore.
Source: http://www.blonnet.com/2009/12/30/stories/2009123051340600.htm
NO INTEREST RATE HIKE LIKELY IN SIX MONTHS: SBI
Mr. O.P. Bhatt, Chairman, State Bank of India told that there would not be hike in lending rates in the next six months despite inflationary pressure because of surplus liquidity in the market and rising deposits. He also said that there was a good amount of liquidity in the market and the credit offtake was slowly picking up.
On mergers of associate banks, Mr. Bhatt told that it was a process of restructuring within the family.
Source: http://economictimes.indiatimes.com/news/news-by-industry/banking/finance/banking/No-interest-rate-hike-likely-in-six-months-SBI/articleshow/5391180.cms
HOME LOANS TO BE LINKED TO PROGRESS OF PROJECT
As a number of developers have either stopped construction midway or slowed down due to shortage of funds and poor sales in 2008 and the first half of 2009, Home Loan providers are now insisting on construction-linked disbursal of funds to new projects. Lending Institutions expect the move to help them monitor the progress of construction and make developers accountable.
HDFC, one of the largest lenders in the home loan segment, has discontinued the practice of up front disbursals and linked the flow of funds to progress of construction.
Source: http://economictimes.indiatimes.com/personal-finance/loan-centre/home-loans/home-loans-news/Home-loans-to-be-linked-to-progress-of-project/articleshow/5386381.cms
AIBOC OPPOSES MOVE TO RESTRUCTURE BANKS
All India Bank Officers' Confederation - Kerala State Committee has protested against the Government's move to restructure public sector banks in the country. Mr. V.K. Prasad, Secretary, AIBOC -Kerala State Committee described the move of the Government to borrow $ 2 billion (Rs.9000 crore) from the World Bank in order to infuse fresh capital to the PSU banks as a danger signal. He also told that the move was mysterious given the satisfactory capital adequacy position of 13.2% of the PSU banks in March 2009 against the mandatory requirement of 9%.
CORPORATION BANK TO EXTEND BRANCHLESS BANKING UNITS
As told by Mr. J.M. Garg, Chairman & Managing Director, Corporation Bank, the bank is planning to operationlise 2000 branchless banking units by the end of this financial year. This is apart from its plan to expand its 'brick and mortar' branch network in tier-3 to tier-6 centres.
In the branchless banking unit model, the bank appoints a business correspondent in an un-banked area who uses biometric smart-cards and voice-guided systems to provide secure banking facilities to its customers.
So far, the bank opened around five lakh no-frill accounts, mobilised Rs.25 crore of deposits and disbursed around Rs.20 crore loans under branchless banking model.
Apart from deposits and loans, the bank has also introduced a remittance service where an account holder can pay the bank-appointed business correspondent for money transfer to another account. The beneficiary can withdraw through the business correspondent at the other end. The bank is using Tata Teleservices Network for the transactions.
Source: http://www.blonnet.com/2009/12/28/stories/2009122851741000.htm
ORIENTAL BANK LOOKING TO ACQUIRE A SOUTH BASED BANK
After five years of acquiring the Hyderabad based Global Trust Bank, Oriental Bank of Commerce has begun hunt for taking over south based bank having synergies to expand business in South. OBC has a strong presence in the Northern region.
Acquisition of funds for taking over another bank may not pose any problem to the bank as its capital adequacy ratio is close to 13% and it could raise further capital through bonds.
Source: http://economictimes.indiatimes.com/news/news-by-industry/banking/finance/banking/Oriental-Bank-looking-to-acquire-a-South-based-bank/articleshow/5384055.cms
DIRECT TAX CODE MAY SPARE HOME LOANS
A Finance Ministry official told to Economic Times that the Government may modify the draft direct tax code to retain tax shelters on interest and principal repayments for home loans to make the proposed new code more attractive for the average Indian. As per the proposed direct taxes code, which has been unveiled for public debate and is due to become operational from April 2011, does not provide tax incentives to loan-funded house purchases that are for personal use.
At present, tax payers are allowed to deduct from their income the interest paid on home loans to a maximum of Rs.1.50 lac every year. In addition, the repayment of the principal amount is also allowed to be included within the rebate available under Section 80 C, which has a maximum limit of Rs.1 lac.
The draft direct tax code has suggested increasing the exemption limit under Section 80C to Rs.3.00 lac, but the list of eligible expenditure/savings does not include the principal payment. The code also restricts the interest deduction only to houses rented out and where such income is included in the income of the assessee.
Source: http://economictimes.indiatimes.com/personal-finance/tax-savers/tax-news/Direct-tax-code-may-spare-home-loans/articleshow/5380167.cms
UBI TO SET UP ASSET MANAGEMETN COMPANY WITH BELGIAN FIRM
According to Mr. S.C. Kalia, Executive Director, Union Bank of India (UBI), the bank is in the process of establishing an Asset Management Company in partnership with a Belgium firm early next year. He also aid that the bank would launch the second phase of its customer-centric Navnirman Programme to become one of the top three public sector banks in the country by 2012. The bank has an ambitious plan to pen 500 more branches across the country and enhance its global footprint. At present, the bank has only one overseas branch in Hong Kong.
The bank is targeting to achieve Rs.285000 crore business by March 2010.
Source: http://economictimes.indiatimes.com/news/news-by-company/corporate-trends/UBI-to-set-up-asset-management-company-with-Belgian-firm/articleshow/5381562.cms
RBI HIKES MOBILE TRANSACTION LIMITS, ALLOWS FUND TRANSFERS
Reserve Bank of India (RBI) increased the cap on daily mobile transactions to Rs.50000/- per day from earlier limit of Rs.5000/- a day for fund transfers and Rs.10000/- a day for purchases. RBI has also permitted banks to allow transactions without end-to-end encryption up to a limit of Rs.1000/- and asked banks to make provision for adequate security measures.
Source: http://www.thehindubusinessline.com/2009/12/25/stories/2009122552000400.htm
AIBOC CIRCULAR NO. 92 DATED 24.12.2009
AIBOC has issued its circular No. 92 dated 24.12.2009 on the need for review of classification of agglomeration. We are reproducing the same here for our readers.
CIRCULAR NO:92 DATE: 24.12.09
TO ALL AFFILIATES/MEMBERS:
CLASSIFICATION OF AGGLOMERATION: NEED FOR REVIEW
We enclose a copy of our letter No. 1452/252/09 dated 23rd December, 2009, addressed to IBA on the captioned issue, contents of which are self explicit.
2. Further developments in the matter will be informed to you.
With greetings,
Sd/-
(G.D. NADAF)
GENERAL SECRETARY
TEXT
We invite your kind attention to the communication issued by you as regards classification of various centres as per the Census 2001 and redefining the agglomeration of Mumbai, Kolkata, Delhi, Chennai and other Metro Centres. The CCA and HRA payable at all these centres have also been revised accordingly. This redefining of the agglomeration has resulted in some anomalies in the payment of CCA and HRA etc.
2. While in some centres there has been increase in the allowances, the other Centres which have been excluded from the earlier Metro Agglomeration of Mumbai, Delhi, Kolkatta etc. have been deprived of the higher quantum of CCA, HRA etc. as applicable to the Metrol centre hitherto.
3. In many Banks, the House Rent Reimbursement is based on area classification. Earlier, Mumbai Agglomeration, for the purpose of House Rent Reimbursement (HRR) was defined by many banks, which comprised all the centres in the contiguous area of the Agglomeration. As a consequence the contiguous areas were being paid HRA as applicable to the Mumbai city. This was applicable in case of Advance rent also, which was as high as the rate prevailing in Mumbai. Immediately after redefining the agglomeration of Mumbai, Delhi, Kolkata etc. the Banks have withdrawn the facilities to the contiguous centres.
4. We wish to bring to your kind notice the fact that it is very difficult to get a reasonable accommodation at lower rates of HRR and Advance rent at the contiguous centres. It may please be noted that the Officers working in Mumbai have been able to get accommodation only beyond Panvel, Virar, Bhiwandi etc. But because of the revised classification by the IBA, these areas have been kept out of the Mumbai agglomeration and hence, the officers are eligible for a lesser quantum of HRR and Advance Rent. This has put the Officers to considerable hardship.
5. Keeping the foregoing in the background, we would like to suggest that the contiguous areas of the Metro Agglomeration may please be put on par with the Metro Centre for the purpose of HRR, Advance Rent and CCA. We request you to take a practical and pragmatic view of the issue and review the classification of various Metro Agglomerations and provide relief to the Officers who are put to substantial financial burden as the HRR and advance rent for the contiguous centres is very meager.
6. This issue may please be put in the agenda for discussion with us in one of the ensuing meetings for discussing the residual issues as part of the 9th Bipartite negotiations.
Thanking,
Yours faithfully,
Sd/-
(G.D. NADAF)
GENERAL SECRETARY
BANK OF INDIA TO LAUNCH 8% HOME LOAN PLAN ON JANUARY 1
Bank of India is set to launch an 8% home loan scheme from January 1, according to Mr. M. Narendra, Executive Director of the bank. The scheme will be open to the applicants from January 1 to February 28. Under the scheme, the bank would offer home loans at 8% for the first two years, after which floating rates would be charged.
Source: http://www.business-standard.com/india/news/boi-to-launch-8-home-loan-planjan-1/380523/
BANKS SHORE UP FUNDS FEARING RATE HIKE
As per the report appearing in the Business Line, commercial banks appear to be trying to second-guess RBI's moves on interest rates and liquidity management as they fear that RBI might suck-out excess liquidity through a hike in CRR to rein in inflation.
Banks have issued Certificates of Deposit (CD) aggregating to about Rs.20000 crore in the past two weeks. The rash of CD issuances has been due to advance tax outflows totalling Rs,.54000 crore in the December quarter. The flurry of CD issuance have pushed up interest rates on these instruments by about 25 basis points in the last fortnight. While State Bank of Travancore issued one-year duration CDs at 5.75% on December 7, Bank of Baroda issued one-year CDs at 5.97% on December 18.
Among those that have raised between Rs.500 crore and Rs.1000 crore through Certificates of Deposit are UCO Bank, United Bank of India, Central Bank of India, Punjab National Bank, Corporation Bank, Canara Bank, Bank of Baroda, State Bank of Travancore and State Bank of Hyderabad.
According to RBI data, banks have garnered about Rs.83000 crore in the first 10 months of the current calendar year through CD issuances against Rs.27000 crore in the corresponding period last year.
Source: http://www.thehindubusinessline.com/2009/12/24/stories/2009122453230100.htm
CORPORATION BANK LOOKING AT BIG-SCALE BRANCH EXPANSION
Mr. J.M. Garg, Chairman and Managing Director, Corporation Bank told Business Line that the bank is planning to open around 700 branches during the next five years. Corporation Bank at present has 1094 branches in the country. Most of the new branches would be opened in tier-3 to tier-6 centres of northern, eastern and western parts of the country.
Mr. Gard said that bank wanted to increase the share of CASA deposits by opening branches in tier-3 to tier-6 centres. It will also help the bank in getting licences from the RBI for opening branches in metro and urban centres where it does not have a presence.
The bank is also planning to upgrade its representative office in Hong Kong into a branch. Bank has another representative office at Dubai.
Source: http://www.blonnet.com/2009/12/24/stories/2009122452060600.htm
CENTRAL BANK OF INDIA REVISES ITS TERM DEPOSIT INTEREST RATES ON DEPOSITS OF RS.1.00 CRORE & ABOVE
Central Bank of India has revised its term deposit interest rates on deposits of Rs.1.00 crore and above with a maturity period of 270 days and above.The revised rates are made effective from 21.12.2009. We are publishing here the existing as well as the revised rates.
Rates For Deposits of Rs.1 Crore and above | ||
Existing Rate w.e.f. 11.11.2009 | Revised rate w.e.f. 21.12.2009 | |
7 days-14 days | 2.00 | 2.00 |
15 days to 45 days | 2.50 | 2.50 |
46 days to 90 days | 3.00 | 3.00 |
91 days to 179 days | 3.50 | 3.50 |
180 days to 269 days | 4.50 | 4.50 |
270 days to 364 days | 5.00 | 5.50 |
1 year to less than 2 years | 5.50 | 6.00 |
2 years to less than 3 years | 5.50 | 6.00 |
3 years to less than 5 years | 5.50 | 6.00 |
5 years and above | 5.50 | 6.00 |
CBOA, AP UNIT'S CIRCULAR NO. 17 DATED 07TH DECEMBER 2009
We are reproducing the circular No. 17 issued by CBOA, AP Unit.
Circular No. GS: 2009: 017 Date: 07.12.2009
TO ALL OFFICERS PLEASE CIRCULATE
Dear Friends,
We reproduce hereunder the Circular No. CIRCULAR/GS/2009/14 dated 03-12-2009 received from our Federation for your information.
With best regard
Yours sincerely
Sd/-
(C.A. MALLIKARJUNA RAO)
GENERAL SECRETARY
.........................................................................................
“We reproduce hereunder the circular received from All India Bank Officers’ Confederation for your information:
CONGRATULATIONS
MINUTES SIGNED ON SALARY REVISION &
2ND OPTION ON PENSION
After two years of persistent efforts, protracted discussions, agitations and strikes, minutes have been signed today between IBA and UFBU on our charter of demands for wage revision and long-cherished demand of one more option to join the pension scheme.
SALIENT FEATURES:
(a) Annual wage increase of Rs. 4816 (Rs. 2239 crores for officers and Rs. 2,577 crores for workmen employees) w.e.f. 1-11-2007.
(b) The additional cost of pension on account of wage revision in excess of statutory contribution of 10% of pay will be shared equally between management and employees each and the share of employees (at 23% of Pay) will be deducted from the agreed wage increase while revising salary and allowances.
(c) All the existing employees who are now in PF scheme (other then SBI) will be given an option to join the existing pension scheme.
(d) All those who have retired after the date of Pension Regulations till date will also be given an option to join the pension scheme.
(e) The additional cost on 2nd option on pension will be shared by the management and employees in the ratio of 70:30.
(f) Contributory Pension Scheme will be introduced for new recruits w.e.f. 01.4.2010.
(g) Full settlement on the above to be finalized within 90 days.
Friends, this minutes denotes a significant achievement by UFBU both in terms of wage revision and also in securing another option for more than 3 lac employees/officers/retirees to join the pension scheme. This achievement has become possible due to the united afforts and struggles by all employees and officers under the banner of UFBU.
We congratulate all our units and members for the inspiring unity, magnificent solidarity and unstinted co-operation.
We shall now move in right earnest to work out the pay scales, allowances and other related issues and finalise the settlement at the earliest for expeditious implementation, payment of arrears, etc.
As regards additional cost on Pension to be contributed by employees, IBA refused to mention the position in respect of SBI employees in the minutes. Therefore, leadership of SBI Staff’ and Officers’ Federations did not become a party to the understandings as interests of SBI Employees was not taken in to consideration by the IBA. We shall share the details later.
Yours sincerely,
Sd/-
(D.S. BHADAURIA)
GENERAL SECRETARY
AIBOC CIRCULAR NO. 91 DATED 18.12.2009
AIBOC has issued its circular no. 91 dated 18.12.2009 on establishment of Local Area Banks. We are reproducing the same here for our readers.
CIRCULAR NO: 91 DATE: 18.12.09
TO ALL AFFILIATES/MEMBERS:
AIBOC OPPOSES THE ESTABLISHMENT OF LABS
INTERVENTION OF THE MINISTRY OF FINANCE SOUGHT
We have to-day sent a communication to the Hon’ble Minister of Finance, the Government of India, New Delhi, conveying our resentment over the reported initiative of the RBI for raising the issue of the establishment of Local Area Banks which was shelved long back due to the pressure created by our organization. A copy of our communication is enclosed.
2. All our affiliates/members are requested to await further developments in the matter.
With greetings,
Sd/-
(G.D. NADAF)
GENERAL SECRETARY
No.1454/245/09 18.12.09
To,
Shri.Pranab Kumar Mukherjee,
Hon’ble Union Finance Minister,
Government of India,
New Delhi – 110 001.
Dear Sir,
RBI INITIATIVE TO ESTABLISH LOCAL AREA BANKS (LABS)
Our attention has been drawn to some of the press reports appearing in regard to the new initiatives of the Reserve Bank of India on establishment of Local Area Banks which was dropped during the middle of 1990s, due to resistance from Unions and also the bad patch that the NBFCs’ were going through along with the Regional Rural Banks which were facing serious operational problems. The issue was put on backburner and efforts were made to consolidate the position of the Regional Rural Banks who were already well established with a good network all over the country, in order to reach the common man in the interior parts. The role of Regional Rural Banks in meeting all the targets set by the Government in the area of priority sector lending and subsequently the larger issue of inclusive banking, which the Central and the State Governments, have been taking up with full force at their command.
2. The creation of Local Area Banks at this juncture, when there are other financial institutions, which are more than adequate to achieve the objectives of the Government, will only result in creating yet another financial institution which will result in overlapping of the operations that are already undertaken by the Public Sector Banks by themselves as well as through the Regional Rural Banks. There is no need to create one more agency in the name of Local Area Banks by the Reserve Bank of India, in the interest of helping the consolidation of the Regional Rural Banks as also the Public Sector banks, who have a wonderful branch net work all over the interior parts of the country.
3. We therefore request you to kindly advise the concerned in the Reserve Bank to drop such move to re-establish the Local Area Banks in the interest of the Public Sector Banks as well as the Regional Rural Banks.
4. Please treat the matter as urgent.
Thanking you,
Yours faithfully,
Sd/-
(G.D. NADAF)
GENERAL SECRETARY
AIBOC CIRCULAR NO. 90 DATED 17.12.2009
AIBOC has issued its circular No. 90 dated 17.12.2009 on wage negotiations. We are reproducing the same here for our readers.
CIRCULAR NO: 90 DATE: 17.12.09
TO ALL AFFILIATES/MEMBERS:
WORKING COMMITTEE MEETING
NEGOTIATIONS TO RESUME IN THE FIRST WEEK OF JAN.2010The Working Committee of the All India Bank Officers’ Confederation which met at Bangalore on 14th of December 2009 had an occasion to deliberate on the various issues connected with the ongoing negotiations in 9th Bipartite settlement which includes the issue of 2nd option on Pension as well. In course of the deliberations, the members expressed their happiness and paid rich tributes to all those who were responsible for the settlement of 2nd Option on Pension with the initiative of the Confederation for the last several years. Our members may recollect that during the 8th bipartite settlement the MOU read as under:-
“The Officers’ Associations demanded one more option for pension considering the fact that many could not opt earlier for various reasons. IBA, however, reiterated its inability to extend the present pension scheme to those who had not opted for pension. However both the parties agreed to discuss alternative proposals.”
2. Taking the dialogue from then onwards it was a long and strenuous journey for the Confederation as well as the constituents of the United Forum of Bank Unions for the last 3 years in ensuring the success of the issue of the 2nd option on Pension.
3. The Committee deliberated on the issue of the Salary Revision and further discussions that are to be completed within the time frame provided in the MOU. In the meanwhile, the IBA also constituted a Small Committee which will go into the nitty gritty of all the details connected with the construction of scales, apportionment of the cost on various headings including the superannuation benefits etc., so that it can meet as frequently as required and keep the working ready for the Negotiating Team for finalisation of the settlement. The Confederation has been requested by IBA to forward the names of two nominees to work in the Small Committee which will be done in due course.
4. After detailed deliberations, it was decided that the next round of discussions should be held in the first week of January 2010 on a date mutually convenient to all concerned. The Small Committee which will be formed for looking after the working in connection with the Officers in the Banking Industry, will consist of 5 members including 2 from the Confederation and one each from the other Officers Organizations. They will meet shortly and workout the modalities for the purpose of finalizing their proposals for the consideration of the Negotiating Team. The Negotiating Committee of the Confederation will meet shortly and formulate their views in order to take up the same with the other Officers’ Organizations as well as IBA for finalisation of our proposal for the consideration of IBA. The Confederation being the majority organization for the Officers’ Organizations – the Co-ordination of AIBOC, AIBOA, INBOC and NOBO formed for the purpose of informal discussions on all the issues connected with the Officers’ community in the banking industry, will meet separately for holding discussions on the various issues well before a formal meeting with IBA is convened.
5. In the meanwhile, all our affiliates/members are requested to await further developments in this regard.
With greetings,
Sd/-
(G.D. NADAF)
GENERAL SECRETARY
AIBOC CIRCULAR NO. 89 DATED 9.12.2009
AIBOC has issued its circular No. 89 on Bipartite Negotiations. We are reproducing the same here for our readers.
CIRCULAR NO: 89 DATE: 10.12.09
TO ALL AFFILIATES/MEMBERS:
BIPARTITE NEGOTIATIONS
In view of our Working Committee meeting scheduled to be held on 14th December 2009, we have requested IBA to postpone the small committee meeting to be held today at IBA. We have to finalise the names for the Small Committee to prepare draft joint note for officers at IBA. The IBA has agreed to our request. A copy of letter addressed to the IBA is enclosed for your information.
2. We shall advise further developments in due course.
With greetings,
Sd/-
(G.D. NADAF)
GENERAL SECRETARY
Encl: As above
Ref. No. 1452/237/2009 9th December 2009
Shri Unnikrishnan,
Dy. Chief Officer,
Indian Banks' Association,
MUMBAI.
Dear Sir,
Meeting of Small Committee
With reference to IBA letter no. HR&IR/MV/665.2234 dated 7th December 2009 and the discussions the undersigned had with you today, we confirm having conveyed to you that we shall provide names of two representatives from AIBOC on 15th December 2009 for attending the work relating to finalising the Joint Note. We are thankful for your agreeing to postpone the meetings proposed for today and tomorrow and to fix them after 15th December 2009.
Thanking you,
Yours truly,
Sd/-
(G.D. NADAF)
General Secretary
DRAFT GUIDELINES ON NOTE AUTHENTICATION AND FITNESS SORTING PARAMETERS
Reserve Bank of India today has placed on its website the draft Guidelines on Note Authentication and Fitness Sorting Parameters for comments/views.
We are placing the guidelines hereunder for our readers.
1. Introduction
These parameters provide the minimum standards for cash handling machines used by banks (hereinafter called ‘the machines’). Notes can only be recycled/reissued if they are evaluated as genuine and fit according to these parameters. Authenticity check is a prerequisite for fitness sorting. Fitness sorting can be done only in case of genuine notes. The machines shall be able to identify and separate suspected counterfeits and notes which are unfit for circulation in terms of these standards in a reliable and consistent fashion.
The machines shall have provision for regular updates and to accommodate new features/ designs/ substrata/ denominations etc. As and when the Reserve Bank of India decides to phase out a specific series (issue) of a specific denomination of notes, the machines shall sort all the phased out notes as unfit.
2. Applicability
These parameters are applicable to machines operated by banks, either directly by their staff or indirectly by their agents. These machines can be of any of the following: (i) machines which check the authenticity and fitness of notes, i.e. note processing machines/ note sorting machines, (ii) machines which check only the authenticity of notes, i.e. note authentication machines. All these machines shall classify the individual notes as either genuine or suspect without the intervention of the machine operator.
3. Authenticity Check
The machines shall perform authenticity check with reference to the features of genuine notes as disclosed by the Reserve Bank of India from time to time. Any note which is not found to be having all the features of a genuine note shall be classified by the machine as suspect.
4. Fitness Sorting
As a part of fitness sorting, notes with any visual or physical defects are to be sorted as unfit as per the criteria set out in Table 1.
Table 1: Sorting Criteria | ||
Sl. No. | Feature | Criteria |
1 | Soiling | General distribution of dirt across the entire note |
2 | Limpness | Structural deterioration resulting in a marked lack of stiffness |
3 | Dog-ears | Corner folds |
4 | Tears | Lengthwise and crosswise cuts |
5 | Holes | Holes of a specific diameter |
6 | Stains | Localised concentration of dirt |
7 | Graffiti | Deliberate graphic alteration of the note |
8 | Crumples | Multiple random folds |
9 | Decolouration | Lack of ink on part or whole of the note, e.g. a washed note |
10 | Folds | Folds reducing the length or width of the note |
11 | Repair | Note repaired using adhesive tape/ paper/ glue |
Soiling refers to the general distribution of dirt across the entire note or in some patterns. Soiling increases the optical density and decreases the reflectance of the notes. Notes exceeding the soiling levels set out in Table 2 shall be sorted as unfit. Both the obverse and the reverse of the note shall be checked for soiling.
Table 2: Soiling Levels | |||
Sl. No. | Denomination | Maximum Density difference | Minimum Reflectance |
1 | Rs. 5 | 0.07 | 85 % |
2 | Rs. 10 | 0.07 | 85 % |
3 | Rs. 20 | 0.06 | 87 % |
4 | Rs. 50 | 0.06 | 87 % |
5 | Rs. 100 | 0.05 | 90 % |
6 | Rs. 500 | 0.04 | 93 % |
7 | Rs. 1000 | 0.03 | 95 % |
Limpness relates to structural deterioration or wear resulting in a marked lack of stiffness in the note paper. Notes with a very low stiffness shall be sorted as unfit. Notes with very low stiffness of paper, i.e. with paper which is worn out in circulation or mechanically mutilated shall be sorted out as unfit. Detectors for paper quality shall be adapted to the same level as for soiling.
(iii) Dog-Ears
Notes with dog-ears with an area of more than 130 mm² and a minimum length of the smaller edge greater than 10 mm shall be sorted as unfit. Chipped notes shall also be sorted as unfit.
(iv) Tears
Notes exhibiting at least one tear at the edge shall be classified as those having tears. Notes with tears larger than those indicated in Table 3 shall be sorted as unfit.
Table 3: Tears | |||
Sl. No. | Direction | Width | Length |
1 | Vertical | 4 mm | 8 mm |
2 | Horizontal | 4 mm | 15 mm |
3 | Diagonal * | 4 mm | 18 mm |
v) Holes
This refers to notes with at least one visible hole. Notes with holes with area exceeding 10 mm² shall be sorted as unfit.
(vi) Stains
Notes shall be detected as unfit if localized - i.e. with limited extension – stain can be recognised on its surface. In case the total area covered by stains exceeds 2,000 mm², the note shall be sorted as unfit. Both the obverse and the reverse of the note shall be checked for stains.
(vii) Graffiti
Graffiti refers to deliberate graphic alteration of the note with for example, figures or letters. Fitness sorting criteria in case of graffiti shall be the same as those for stains. Both the obverse and the reverse of the note shall be checked for graffiti.
(viii) Crumples/ Folds
Crumpled/ folded notes shall be sorted as unfit if the folds result in reduction of the original note in length or width greater than 3 mm.
(ix) Decolouration
Notes affected by decolouration shall be sorted as unfit if the ink is partially or wholly missing from its surface. Both the obverse and the reverse of the note shall be checked for decolouration.
(x) Repair
A repaired note is created by joining parts of the same note together, for example, by using extraneous matter such as tape, paper or glue. Repairs covering an area greater than 100 mm² and where the thickness of the extraneous matter is more than 50 μm thick shall be sorted as unfit.
5. Mutilated, Imperfect and Mismatched Notes
A mutilated note is note, of which a portion is missing or which is composed of more than two pieces. An imperfect note is a note, which is wholly or partially, obliterated, shrunk, washed, altered or indecipherable but does not include a mutilated note. A mismatched note is a note, which has been formed by joining a half note of any one note to a half note of another note. The machine shall separately identify mutilated, imperfect and mismatched notes within the notes classified as unfit and sort them to the Reject pocket.
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