The Committee on Procedures and Performance Audit on Public Services (CPPAPS or the Tarapore Committee) has recently examined the important issues relating to Currency Management, particularly, the interface of the `Common Person' with the Reserve Bank of India (RBI) and the commercial banks. The Committee has noted with satisfaction that the concerted efforts by the RBI and the Government of India (GoI) have largely alleviated the chronic shortages of banknotes 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 Committee has also observed that not only efforts should continue so that the 'inconveniences' experienced by the public in the matters relating to banknotes and coins are removed, considering the statutory role of the RBI and the changes in public demand, the RBI and the banks should put in place a pro-active mechanism for currency management. The RBI has placed on date the Action Taken Report on Currency Management on its website.

The Committee has observed that the RBI should take appropriate action to remove the 'inconveniences' experienced by the public in using banks for obtaining their requirement of banknotes and coins including exchange of soiled and mutilated notes, as also uncurrent and current coins. It should also take steps for early introduction of Rs. 10 coins, immediate end to parallel supply of banknotes and coins of the same denomination, eliminating shortages in incipient stages so that they do not snowball, consider paying incentive to banks for acceptance of return of uncurrent coins, publish public friendly material on issues relating to currency management that concern the common man, such as, Note Refund Rules and Citizens' Charter and making them easily available at bank counters/halls. The Committee has also recommended that the RBI should review its instructions and where the instructions are retained, violation should invite adverse action and such action should be put in public domain. The Committee has also recommended that the 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.

The RBI has already 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 RBI 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.