The Reserve Bank of India-constituted committee on procedures and performance audit on public services (CPPAPS) has recommended early introduction of coins of Rs 10 denomination.
RBI should also immediately put an end to parallel supply of bank notes and coins of same denomination (like that of Rs 5) currently in circulation and eliminate shortages in incipient stages so that they do not snowball, CPPAPS, headed by former RBI Deputy Governor S Tarapore said.
The committee said considering the statutory role of RBI and changes in public demand, the regulator and banks should put in place a pro-active mechanism for currency management.
RBI should review its instructions and where instructions are retained, violation should invite adverse action and such action should be put in public domain, it said.
The central bank should consider paying incentives to banks for acceptance of returning of coins which are not in use and bring out public-friendly material on issues relating to currency management that concerns the common public such as note refund rules and citizens' charter and making them easily available at bank counters/halls, the committee said.
The CPPAPS has recommended that currency chest agreements should be revised so as to include in them a provision for a monetary penalty for non-compliance of the extant directions and guidelines, RBI said in a release.
The Tarapore committee observed that RBI should take appropriate action to remove 'inconveniences' experienced by public in using banks for obtaining their requirement of notes and coins including exchange of soiled and mutilated notes, as also current coins and those which are not in use.
The CPPAPS has recently examined important issues relating to currency management, particularly, the interface of the 'common person' with the RBI and the commercial banks.
It expressed satisfaction that concerted efforts by RBI and the government have largely alleviated the chronic shortages of bank notes and coins and to that extent the severe hardships faced by the common person have been eased.
The measures relating to the clean note policy and the currency verification, processing and sorting systems have also provided succour to the common person seeking facilities at the RBI or commercial banks.
The RBI has forwarded the recommendations of the Tarapore Committee to the concerned banks for follow-up action through their internal ad-hoc committees on Procedures and Performance Audit on Public Services.
The central bank has urged the ad-hoc committees to initiate necessary steps for simplification of procedures and practice in these areas especially for transactions with the individual members of public.