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Currency Management. Presentation by Janaki Ravindran, Manager, Currency Chest, Kochi November 6, 2007. Objectives of Currency Management …. print notes and mint coins distribute adequate notes and coins maintain quality of notes in circulation

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currency management

Currency Management

Presentation by

Janaki Ravindran, Manager,

Currency Chest, Kochi

November 6, 2007

objectives of currency management
Objectives of Currency Management …..
  • print notes and mint coins
  • distribute adequate notes and coins
  • maintain quality of notes in circulation
  • withdraw unfit notes from circulation & destroy them
  • keep up well secured processes

Issues in Currency Management November 6, 2007

currency management how much to print mint
Currency Management–how much to print & mint.
  • Incremental requirement-growth rate and inflation
  • Replacement requirement-soiled notes withdrawn from circulation
  • Reserve requirement-to meet contingencies
  • Statistical analysis and long-term forecast
  • Indent placed with the four printing presses and four Mints

Issues in Currency Management November 6, 2007

currency management in india continued
Currency Management in India–continued…….
  • Combined capacity of the four Mints is 3700 million pieces per annum
  • Annual capacity of the Presses is as under:

Press Capacity(mpcs)

Nashik(GOI) 5800

Dewas (GOI) 2620

Mysore(BRBNMPL) 4770

Salboni(BRBNMPL) 4770

Total Capacity 17960

Issues in Currency Management November 6, 2007

flow of notes coins
Flow of Notes & Coins

COINS

NOTES

4 Mints

Presses

4 mint-linked RBI Offices

RBI Offices(20)

Public

Chest branches & RBI Offices

Chest branches

Issues in Currency Management November 6, 2007

issues in currency management
Issues in Currency Management
  • Mechanisation
  • Trends in Counterfeiting
  • Security features of banknotes
  • Committee on Customer Service (Tarapore Committee) recommendations
  • ICCOMS
  • ISO Certification
  • Future Agenda

Issues in Currency Management November 6, 2007

processing of soiled notes mechanisation
Processing of soiled notes-mechanisation
  • 54 Currency Verification and Processing Systems installed and commissioned in all offices.
  • 28 Shredding and Briquetting System installed and commissioned in all offices.

Issues in Currency Management November 6, 2007

mechanisation continued
Mechanisation continued…
  • Note Counting Machines at counters.
  • Coin Dispensing machines in banking halls
  • Non-stapling of notes
  • Note Sorting Machines at all chest based banks/branches.

Issues in Currency Management November 6, 2007

trends in counterfeiting menace and concerns
Trends in Counterfeiting Menace and Concerns
  • High quality of counterfeit notes.
  • Use of counterfeit for various illegal and nefarious activities.
  • GOI’s High Level Committee examined the entire gamut of currency management
  • Recommendations for additional security features, especially in high denominations

Issues in Currency Management November 6, 2007

recent developments to combat the menace of counterfeiting
Recent Developments to combat the menace of counterfeiting
  • Enhanced security features
  • Publicity campaigns on security features of currency notes
  • Study of counterfeit notes detected
  • Initiation of R & D in counterfeit detection

Issues in Currency Management November 6, 2007

overt security features
Overt security features

Issues in Currency Management November 6, 2007

need for revised security features
Need for Revised Security Features
  • Security features need to be reviewed and updated from time to time in order to
  • Take advantage of latest research and technology in the field
  • To help prevent counterfeiting and stay ahead of counterfeiters
  • Have machine-readable security features for mechanised processing of notes

Issues in Currency Management November 6, 2007

factors influencing decision to change design security features of banknotes
Factors influencing decision to change design & security features of banknotes

Public & user

survey

Threat analysis

Technical expertise

Human perception

studies

Design & security

features

of banknotes

Incremental cost

and benefit

Counterfeit

analysis

Production, issuance

and circulation

Public education,

authentication

and enforcement

Issues in Currency Management November 6, 2007

new additional security features
New/Additional Security features
  • Security Thread-Rs 100, Rs 500, Rs 1000
  • Machine-readable windowed demetalised clear text magnetic security thread with exclusive colour shift from green to blue, 3 mm wide for Rs.1000 & Rs.500 and 2 mm for Rs.100
  • Security Thread-Rs 10, Rs 20, Rs 50
  • Machine-readable windowed demetalised clear text magnetic security thread, 1.4 mm wide

Issues in Currency Management November 6, 2007

new additional security features15
New/Additional Security features
  • Electrolyte Watermark of denominational numeral to be located alongside Mahatma Gandhi watermark
  • Omron anti photocopying feature-to be included in Rs 100 and Rs 50, besides Rs 500 & Rs 1000
  • Year of printing to be incorporated at the printing stage on the reverse of the bank note.

Issues in Currency Management November 6, 2007

committee on customer service observations recommendations
Committee on Customer Service-Observations/Recommendations
  • Chronic shortages of notes and coins have been largely alleviated
  • Empowerment of the Common Person
  • Simplification of Note Refund Rules
  • Revamping of Citizens’ Charter for Exchange facilities
  • Parallel supply of notes and coins not sustainable
  • Early introduction of Rs 10 coins

Issues in Currency Management November 6, 2007

committee on customer service observations recommendations17
Committee on Customer Service-Observations/Recommendations
  • Strong action in case of violation of RBI’s directions
  • Revision of currency chest agreement
  • Master Circulars in intelligible language
  • Delegation of authority to the bank branches to be exhibited prominently
  • Removal of inconveniences to the Common Person

Issues in Currency Management November 6, 2007

customer service study by bits pilani on need and use behaviour of small coins major findings
Customer Service-Study by BITS, Pilani on need and use behaviour of small coins-major findings
  • Availability of small coins is satisfactory
  • Non-availability of 25 paise and 50 paise coins is mainly due to reluctance to use
  • The traders charge more from the customer or give an item of coin change.
  • customers 'do nothing' when trade does not give correct coin change.
  • The preferred lot size for coins is 50 for most denominations and 100 for Re 1

Issues in Currency Management November 6, 2007

implementation of integrated computerized currency operations and management system iccoms
Implementation of Integrated Computerized Currency Operations and Management System (ICCOMS)

The Institutional Framework

  • DCM at Central Office
  • Issue Departments at 18 Regional Offices. 1 Issue sub-Office at Lucknow and 1 Currency Chest at Kochi
  • The currency chest system maintained by the banks and State Treasuries

Issues in Currency Management November 6, 2007

the iccoms project main objectives

The ICCOMS Project-Main Objectives

Improve Operational Efficiency

Faster and Accurate Accounting

Improve MIS and Planning

Better Monitoring and Control

Better Customer Service

the iccoms project main components
The ICCOMS Project – Main Components…
  • Transaction Processing System at the ID (General) and Cash Departments
  • Work flow system in Cash Dept. and other relevant areas
  • Currency Chest Reporting System
  • MIS at IDs
  • MIS at DCM

Issues in Currency Management November 6, 2007

scope of iccoms dcm
Scope of ICCOMS – DCM
  • Planning for Currency Issue
  • Allocation and Distribution of Currency
  • Monitoring of Currency Stock, Distribution, Processing, Accumulation, Forgeries, Reconciliation of Accounts etc.
  • Performance and Exception Monitoring
  • Infrastructure Planning

Issues in Currency Management November 6, 2007

present status
Present Status
  • The Vendor (M/S CMC Ltd.) has been awarded the contract as per the recommendations of the Project Committee after due bidding process.
  • Vendor has completed a study of the user requirements by examining the SRS prepared by the Bank earlier. Vendor also visited a few ROs to study the end user requirements.
  • The project has been completed and all Regional Offices have commenced `live-run’ on the Currency Chest Reporting System (CCRS) and the Chest Accounting Module (CAM) of ICCOMS – ID component. It is an on-line process and once these two components are completed the Currency Management Information System (CMIS) Module at DCM will be taken up for implementation.

Issues in Currency Management November 6, 2007

iso certification in currency management
ISO Certification in currency management
  • Activities of currency management service oriented
  • Citizens’ Charter can form the basis for measuring quality of service
  • Single Window Service
  • Implementation of Clean Note Policy
  • Computerisation of Work Flow

Issues in Currency Management November 6, 2007

iso certification dcm and id at hyderabad and kolkata
ISO Certification-DCM and ID at Hyderabad and Kolkata
  • Documented set of procedures
  • In-house awareness training on stipulated procedures
  • Training to officials of banks and government departments
  • Monitoring & Control Mechanism such as Statutory Audit, Concurrent Audit, Management Audit & Systems Inspection

Issues in Currency Management November 6, 2007

iso certification scope of activities
ISO Certification-Scope of Activities
  • Ensure standardisation of printed notes
  • Supply of notes to currency chests
  • Maintain quality of notes in circulation
  • Process of withdrawal of soiled notes
  • Disposal of soiled notes
  • Exchange of notes and coins
  • Adjudication of mutilated notes
  • Monitor and control circulation of counterfeit notes

Issues in Currency Management November 6, 2007

currency management future
Currency Management - Future
  • Contain the volume of notes in circulation.
  • Coin Circulation – increase the value
  • Simplification / rationalization of procedures-decentralization.
  • Mechanization keeping in pace with the change in banking technology world-wide
  • Enhancement of security features

Issues in Currency Management November 6, 2007

future agenda
Future Agenda
  • Increase the life of bank notes
  • Concept of flexible resource circle
  • Proximity and logistics should be the criteria
  • Direct remittances from the Presses
  • Outsourcing of lower value note distribution on patterns similar to coins
  • Implementation of Integrated Computerised Currency Operations and Management System (ICCOMS)

Issues in Currency Management November 6, 2007

future agenda contd
Future Agenda-contd……
  • Revision of currency chest agreement
  • Penalty for breach or non-implementation of any part of the agreement
  • Penalty in monetary terms
  • Suspension of chest facility in extreme cases

Issues in Currency Management November 6, 2007

future agenda contd30
Future Agenda-contd……

Levying of Penal interest for

  • Wrong/delayed/non reporting of the currency chest transactions
  • Shortage or loss of currency found in the chest or small coin depot
  • Unsorted notes remitted by a chest
  • Amounts kept in safe custody in sealed covers, trunks, etc. on behalf of Courts, Government Departments, etc., and included in the chest balance
  • Shortage/forged notes in remittance received from the currency chest

Issues in Currency Management November 6, 2007

future agenda contd31
Future Agenda-contd……

Levying of Penal interest for

  • Deficiency in customer service such as not extending exchange facilities for notes and coins
  • Not displaying information/notices regarding services rendered to the customers in writing in branch premises
  • Violation of the Reserve Bank's instructions/ guidelines
  • Reserve Bank may consider suspension/ withdrawal of the currency chest facility in case of persistent non-compliance

Issues in Currency Management November 6, 2007

currency management32
Currency Management

Thank You

Issues in Currency Management November 6, 2007