Mumbai, Sept 16: The Reserve Bank plans to comprehensively revamp its currency management infrastructure over the next 4-5 years, mainly to ensure adequate storage and handling capacity to cater to the future cash needs of the growing economy.
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 mooted to modernise the existing infrastructure, according to an RBI document.
The expected timeline for the whole project is 4-5 years, according to the expression of interest (EoI) issued by the Reserve Bank of India (RBI) for procurement of consultancy and project management services for the modernisation of currency management infrastructure.
“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 thereof is expected to be slower over the next decade,” the document said.
Further, the central bank said the trend in volume growth is expected to continue, and the rate may even accelerate, such that the value needs of the public are met sufficiently yet conveniently.
Notes in Circulation (NIC), in volume and value terms, have increased considerably over the past two decades. NIC volume stood at 136.21 billion pieces (bpcs) on March 31, 2023, and 146.87 bpcs as of March 31, 2024.
Coins in Circulation (CIC) have also increased in terms of volume and value.
The RBI said several central banks/monetary authorities have been facing multiple challenges in currency management due to the increase in the volume of banknotes printed, distributed, retrieved and processed as also due to increasing costs and security risks associated with them.
To handle the increasing volume of banknotes, some central banks/monetary authorities have proactively modernised their currency management infrastructure by adopting suitable re-engineering of their currency management processes and setting up separate facilities for the handling of banknotes.
These countries include Austria, Egypt, France, Germany, Hungary, Indonesia, Japan, Malaysia, and the USA.
The RBI, according to the document, is interested in modernisation of the currency (banknotes and coins) management infrastructure across India to create adequate state-of-the-art storage and handling capacity to meet future cash needs of the economy, enhancing efficiency in currency management operations, ensuring security of the highest possible order while contributing towards a greener planet.