Mumbai: As part of its clean note policy, Reserve Bank of India (RBI) today (Jan 8, 2004) warned banks that any bank or branch found issuing or accepting note packets in stapled condition will be liable to be penalised under the existing provisions of Banking Regulation Act, 1949.

RBI had last year issued a directive under Section 35A of the Banking Regulation Act to all commercial, regional, rural and local area banks instructing them to do away with staple of note packets and to secure them with paper bands, the central bank said in a release in Mumbai.

It had also asked banks to issue only clean notes to the general public and to stop writing on the watermark of notes.

RBI said it, however, received complaints from the public stating some banks/branches continued to accept or issue notes in stapled condition.