Currency chest

Presented by:
Ravish prakash (40)
Agencies Involved in
currency flow
MOF
Police Railways

RBI's
RBI Presses

Govt
Presses

Mints Banks
(chests)
 Flow of Notes & Coins Public

NOTES COINS

Chest branches Chest branches & RBI

Offices

Public

RBI Offices 4 mint-linked RBI Offices

Presses 4 Mints
 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
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
Chandigarh

Noida
New Delhi

Jaipur
Lucknow

Guw ahati
Kanpur
Patna
Bhopal

Salboni
Aham adabad Dew as
Calcutta
Calcutta
Nagpur
Mum bai Nasik Bhuaneshw ar

Fresh Notes/Coins
Mum bai
Byculla Hyderabad

Hyderabad
from Press/Mint pass
Press on to the banks/public
only through RBI
Mysore Banglore

Mint
Issue Offices offices – hence cross-
Chennai

Trivandrum
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……..