RBI to overhaul currency management infrastructure for future needs

RBI: The plan has created greenfield currency management centers, warehouse automation, security and surveillance systems, an inventory management system, and a centralized control center.

The Reserve Bank of India (RBI) is set to undertake a comprehensive revamp of its currency management infrastructure over the next 4-5 years.

This initiative aims to enhance storage and handling capacity to meet the future cash demands of India’s growing economy.

Planned Upgrades

The RBI plans to establish greenfield currency management centers, integrate warehouse automation, improve security and surveillance systems, implement an inventory management system, and develop a centralized command center.

These changes are designed to modernise and optimise existing currency management operations, as outlined in the bank’s Expression of Interest (EoI) for consultancy and project management services.

Projected Growth in Currency Circulation

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Despite the recent moderation in the growth rate of Notes in Circulation (NIC), the RBI anticipates a continued positive trend in the foreseeable future, although the pace may slow over the next decade.

As of March 31, 2024, NIC volume reached 146.87 billion pieces, up from 136.21 billion pieces the previous year. Coins in Circulation (CIC) also saw an increase, with 132.35 billion pieces in 2024 compared to 127.92 billion pieces in 2023.

Focus on Future Needs and Efficiency

With the continued rise in both NIC and CIC, the RBI emphasised the need for modernisation to ensure sufficient capacity for future growth. This includes addressing the increasing volume of soiled notes as part of the RBI’s Clean Note Policy.

The bank aims to optimise processes and make currency management safer and more environmentally friendly.

India’s currency is currently printed at four printing presses, while coins are minted at four mints. The planned upgrades will ensure that the country’s currency management system remains efficient and capable of meeting the evolving demands of the economy.