Currency chest

Presented by:

Ravish prakash (40)

Agencies Involved in currency flow

RBI

Banks(chests)

MOF

Govt Presses

Mints

Police Railways

RBI's Presses

Flow of Notes & Coins

Presses

RBI Offices

Chest branches

Public

NOTES

4 Mints

4 mint-linked RBI Offices

Chest branches & RBI Offices

Public

COINS

Network of Currency Chests

• RBI is located only in 18 places for currency operations

• Distribution of notes and coins throughout the country is done through designated bank branches, called chests

• Chest is a receptacle in a commercial bank to store notes and coins on behalf of the Reserve Bank

• Deposit into chest leads to credit of the commercial bank’s account and withdrawal, debit

More on Currency Chest

• Meets currency requirement of public

• Withdraws unfit notes• Exchange facility from one

denomination to another• Payment requirement of the

Government• Exchange of mutilated notes• Avoids frequent movement of cash• Chest branch operates with

minimum cash balance

Currency Chest Mechanism

• Net deposit /withdrawal of notes and coins at the chest is reported on daily basis to parent Issue Office

• Overall deposit or withdrawal leads to credit or debit of bank’s account in RBI

• Net withdrawal from chests means expansion of currency and deposits means contraction

• Notes in circulation being the liability of RBI, it adjusts its asset-liability position centrally for such expansion or contraction

Movement of Treasure

• Specially built trucks for short distance (journey completed during the day)

• Railways for long distance• Guarded by police• Remittance accompanied by officials of RBI to

chests• Further movement from chest to a branch

done by the bank concerned

How much to print & mint

• Incremental needs• Replacement needs• Reserve Needs• Statistical analysis and long-term forecast• Printing/minting allocated between the

presses/mints and delivery schedule decided in advance

Capacity of Presses & Mints

• Total annual capacity of Presses: 18 bn• Can print up to 28 bn with two shifts• Total minting capacity: 4,700 mn• RBI’s annual needs:

– Notes: about 12,000 mn pieces– Coins: about 5,000 mn pieces

Cross-movement of Currency

Mint

Press

Issue Offices

Chandigarh

New Delhi Jaipur

Lucknow

Kanpur Patna

Guwahati

Ahamadabad Calcutta

Hyderabad

Banglore

Trivandrum

Chennai

Mumbai Byculla

Bhuaneshwar Nagpur

Mysore

Nasik

Dewas Salboni

Noida

Mumbai Hyderabad

Calcutta

Bhopal

Fresh Notes/Coins from Press/Mint pass on to the banks/public only through RBI offices – hence cross-movement

Challenges of Distribution

• Size of the country and volume of currency• Security and availability of railway wagons when

required• Political boundaries defining jurisdiction of Issue

Offices lead to sub-optimal logistics• Cross movement of currency is unavoidable

Challenges of Distribution (contd)

• Security- police is preoccupied with other activities of priority

• Private security is unavailable and not favoured

• Transport through railways involves enormous coordination of logistics

• Privatization of transport – introduced recently in respect of coins only

Meeting the challenge of distribution• The volume should be contained within sustainable

levels by– Shift in printing from lower to next higher denominations (a

perceptible shift already visible)– Coinise Rs.10 denomination– Try out other substrate for printing – coating of paper or

polymer, although currently there is no plan to introduce polymer notes.

• Banks have been compelled to dispense with the age-old practice of stapling of notes

• Sorting of notes to get decentralized through banks or processing centres

Thank you……..