Along with the Government of India, the Reserve Bank of India is responsible for the design, production, distribution and overall management of Indian Currency. Their goal is to ensure an adequate supply of clean and genuine notes within the system.
In addition to supplying and distributing the adequate quantity of currency, it is also their responsibility to maintain the quality of banknotes which are in circulation by the continuous supply of clean notes and timely withdrawal of soiled notes. The Reserve Bank of India also consistently put efforts to maintain the confidence of the public in the currency by constantly introducing banknotes with a new design and security features.
Currency management is a statutory responsibility conferred on the central bank by the RBI Act, 1934. Section 22 of RBI Act, 1934 also authorises RBI as the sole authority to issue banknotes.
Some interesting facts about the Indian Currency
- Banknotes of various denominations ranging from Rupee 2 to Rupee 10,000 can be issued by RBI with the signatures of RBI Governor. Currently, highest denomination banknote is of Rupee 2,000.
- Coins are issued by the Central government while RBI circulates them into the system. A coin of up to 1,000 rupee denomination can be issued by the government.
- Rupee 1 denomination note is also issued by the central government with the signatures of Finance Secretary.
- India is the second largest producer as well as consumer of currency notes, next only to China.
- The value of banknotes in circulation has increased from about 1.72 billion rupees in 1935 to about 13,102 billion rupees in 2017.
- As per Coinage Act 2011, the 50 paise coin is legal tender to pay up to 10 rupees. This means you can pay a maximum of 10 ten rupees by only using 50 paisa coins.
- While Coins of the denomination from rupee 1 to rupee 10 are legal tender to pay up to 1,000 rupees.
- As per the RBI Act 1934, RBI can issue currency note of up to rupee 10,000 denomination.
- Reserve Bank of India continued to be the monetary authority of Pakistan till June 30, 1948. After that, the State Bank of Pakistan was established on July 1, 1948, which started to function as the monetary authority of Pakistan.
- The first governor of RBI Sir Osborne Smith didn’t sign any banknotes. The Reserve Bank of India’s first currency notes were signed by its second governor, Sir James Taylor.
Where bank notes are printed and coins are minted?
The printing and supply of bank notes are entrusted to the four printing presses. The two presses are owned by Security Printing and Minting Corporation of India Limited (SPMCIL) which is wholly owned by the Government of India. The other two presses are owned by Bhartiya Reserve Bank Note Mudran Private Limited which is wholly owned by the Reserve Bank of India.
The four printing presses are as:
The production and supply of coins are entrusted to the four mints which are owned by SPMCIL. The four mints are located in Mumbai, Kolkata, Noida and Hyderabad. Although coins are minted by a wholly owned subsidiary of the Government of India, yet the circulation of coins is delegated to the Reserve Bank of India as per section 38 of the RBI Act, 1934.
The four coin minting presses are as:
How Currency is managed and distributed?
Section 23 of the RBI Act 1934 had mandated that the functions of issuance of bank notes are to be conducted by the Reserve Bank of India through a separate department called Issue department. Hence the RBI has separate issue departments at its regional offices to manage the operational part of currency management, while the overall management is carried out by the department of currency management which is located at the Central office of RBI in Mumbai.
In addition to the 19 issue offices (located at Ahmedabad, Bangalore, Bhopal, Bhubaneswar, Chandigarh, Chennai, Guwahati, Hyderabad, Jaipur, Jammu, Kanpur, Kochi, Kolkata, Lucknow, Mumbai, Nagpur, New Delhi, Patna, and Thiruvananthapuram) the RBI is supported in its function by a network of Currency Chests, Small Coin Depots, bank branches, and ATMs spread over the country.
Currency Chest and Small Coin Depots are storehouses of banknotes and rupee coins which are located at bank branches. Most of the Currency Chests and Small Coin Depots are with commercial banks, though there are a few Currency Chests established at State Co-operative Banks, Regional Rural Banks, State Treasury Offices, and one is even at RBI’s Kochi office.
As per 2017, there are total 4,034 Currency Chests and 3,707 Small Coin Depots in the country, out of which about 2,647 Currency Chests and 2,515 Small Coin Depots are operated by the State Bank of India.
New Banknotes in circulation & their features
Rupee 10 Bank note
Rupee 50 Bank note
Rupee 200 Bank note
In addition to these rupee 500 and rupee 2,000 currency notes are also in circulation. The rupee 500 note has dimensions of 66mm x 150mm with the motif of Red fort on it. It is a stone grey coloured note. While 2,000 rupee note has a motif of Mangalyaan on it and its dimensions are 66mm x 166mm.
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