How Currency is Issued in India?
Currency Framework:
As per the provisions of the Section 22 of the Reserve Bank of IndiaThe Reserve Bank of India was established on April 1, 1935 in accordance with the provisions of the Reserve Bank of India Act, 1934 with ..... Act 1934, Reserve Bank of India In 1926, the Royal Commission on Indian Currency and Finance which is also known as the Hilton-Young Commission recommended the creation of a central bank. ..... has the sole right to issue Bank notes of all denominations.
-
Prior to this currency functions were carried out by the Controller of Currency.
|
Please note that the Government of India was conferred upon the monopoly of note issue by the Paper Currency Act of 1861. Before that, a practice of private and presidency banks issuing notes was prevalent. Till 1935, Controller of Currency under the Government of India managed the issue of currency. |
Reserve Bank is responsible for the design, production and overall management of the nation's currency, with the goal of ensuring an adequate supply of clean and genuine notes. In consultation with the Government, the Reserve Bank routinely addresses security issues and targets ways to enhance security features to reduce the risk of counterfeiting or forgery of currency notes.
-
At present, notes in India are issued in the denomination of ` 5, `10, `20, `50, `100, `500 and `1,000.
-
The printing of `1 and `2 denominations has been discontinued, though the notes in circulation are valid.
-
Coins up to 50 paisa are called "small coins" and coins of Rupee one and above are called "Rupee coins".
|
-
The distributionReturn to investors of the accumulated income of a trust or mutual fund and distribution of capital gains. of Coins is undertaken by RBI as an agent of the Government, (coins are minted by the Government and NOT by RBI)
Issue Department:
Please note that RBI has a separate department called issue department whose assets and liabilitiesAny claim for money against the assets of a company, such as bills of creditors, income tax payable, debenture redemption, interest on secured and unsecured ..... are kept separate from the Banking Department.
Currency Department:
Currency Management function of Reserve Bank is carried out at the "Department of Currency Management" located at Central Office Mumbai. There are 19 Issue offices. RBI authorizes selected branches of Banks to establish Currency Chests and Coin Deposits.
-
At present there is a network of 4281 Curency Chests and 4044 Small Coin Deposits.
Currency Chests
Currency chests are storehouses where bank notes and rupee coins are stocked on behalf of the Reserve Bank. The currency chests have been established with State Bank of India, six associate banks, nationalized banks, private sector banks, a foreign bank, a state cooperative bank and a regional rural bank.
-
Deposits into the currency chest are treated as reserves with the Reserve Bank and are included in the Cash Reserve RatioThe Cash Reserve Ratio is the amount of funds that the banks are bound to keep with Reserve bank of India, with reference to the ......
Locations of Note Printing Presses:
-
The Security Printing and Minting Corporation of India Limited (SPMCIL) prints the notes. It is a wholly owned company of the Government of India.
-
Its printing presses are located at Nasik (Maharashtra) and Dewas (Madhya Pradesh).
-
-
Apart from that, the Bharatiya Reserve Bank Note Mudran Pvt. Ltd. (BRBNMPL), a wholly owned subsidiary of the Reserve Bank, also has set up printing presses.
-
The presses of BRBNMPL are located at Mysore in Karnataka and Salboni in West Bengal.
-
Coins and notes as Legal Tenders:
-
Please note that One Rupee Note and One Rupee coins are legal tenders for unlimited amounts.
-
50 Paisa coins are legal tender for any sum not above Rs. 10.
-
The coins of smaller than 50 paisa value are legal tenders of a sum below Re. 1
Security Printing and Minting Corporation of India Limited (SPMCIL) has 4 mints for coin production located at Mumbai, Noida, Kolkata and Hyderabad.
Star Series Notes:
The Star series notes are currently issued in Rs. 10, 20, 50 and `
100. Earlier were only 10, 20, 50, but now `
100 since 2009 also.
-
These notes are issued to replace the defected printed notes at the printing press. They have an additional character of a star and the bundles are NOT in series. Rest all the features are same.
