Revise in RBI Currency Management Infrastructure

For the next 4-5 years, The Reserve Bank of India (RBI) has planned to thoroughly revamp its currency management infrastructure to ensure an adequate storage and steward capacity to cater to the future cash needs of the growing economy. According to the recent RBI document – the creation of greenfield currency management centres, the introduction of warehouse automation, the installation of security and surveillance systems, an inventory management system, and a centralised command centre are being broached to improve the existing infrastructure. According to the expression of interest (EOI) published by the Reserve Bank of India (RBI) for procurement of consultancy and project management services for an update of currency management infrastructure, the expected timeline for the completion of the entire project is estimated to be around 4 to 5 years.

“Despite moderation in the growth rate of NIC (Notes in Circulation) in the last three years, analysis indicates that the growth will continue to be positive over the foreseeable future though the pace thence is expected to be slower over the next decade,” as per the recent document.

Furthermore, the central bank shared that the current of volume growth is expected to persist and the rate may even expedite such that the valuable needs of the public are not just met adequately but conveniently too.

In terms of volume and value Notes in Circulation (NIC) and Coins in Circulation (CIC) have increased over the past years. Notes in Circulation (NIC) volume stood at 136.21 billion pieces on March 31, 2023, but as per the recent report it increased considerably till 146.87 billion pieces on March 31, 2024. Similarly, Coins in Circulation (CIC) volume stood at 127.92 billion pieces s of March 31, 2923, but it too increased till 132.35 billion pieces as of March 31, 2024.

Across the country, the new banknotes and coins are received at nineteen Issue Office (IOs) from where they are further distributed to about 2800 Currency Chests (CCs) which is operated by schedule banks. The banknotes are printed at four printing presses and coins are minted at four mints.

The Reserve Bank of India (RBI) stated that several respective central banks and monetary authorities have been facing multiple challenges in currency management due to the increase in the process of volume of banknotes such as – printing, distributing, retrieving and processing. Apart from these the increasing cost and security risk associated with the process also stood out to be a major problem. To tackle the increasing volume of banknotes few central banks or monetary authorities have proactively updated their currency management infrastructure by adopting suitable separate facilities to tackle this situation.

It is noted through the document that The Reserve Bank of India (RBI) is highly interested in executing an updated and optimised version of the currency management infrastructure across India to ensure an adequate capacity as well as to make the process safer and environmentally friendly, enhancing efficiency in its operations while also contributing towards a greener planet.