Is it possible to designate a Bank that is not a customer as exempt? I know that banks are exempt so far as their domestic activity, but does that apply if the bank in question does not have a transaction account with the Bank wanting to grant the exception? If so, how would the empting bank go about the monitoring requirements? The reason I ask is that a question has arisen in a situation in which one bank had an unusual(not 'frequent') need for cash and purchased cash from a neighboring bank. The regulation clearly states that purchases of cash from a FRB is exempted, but does not address purchases from another non-affiliated bank. Can these transactions be exempted? If so, what are the proper procedures for designating such a Bank exempt? It seems to me that such transactions would not be exemptible, but then filing a CTR seems somehow wrong as well.

File a DEP on the bank. End of story. No monitoring required. The fact that the bank is not a customer does not matter.