The Reserve Bank gets its role in currency management from the Reserve Bank of India Act, 1934. The Government of India, on the aid-advice of the Reserve Bank, decides on various denominations of banknotes to be issued. The Reserve Bank also co-ordinates with the Government in the designing of banknotes, including various security features.
Tasks of RBI related to Currency Management
The Reserve Bank of India (RBI) has the task of issuing, managing and distributing currency notes and coins. The Reserve Bank manages currency in India on the basis of the Reserve Bank of India Act, 1934.
Constitution of a High Level Committee on Currency Management To address the significant challenges faced in India and other related issues, a High Level Committee which was constituted by Government of India (Chairman: Dr. K.C. Chakrabarty). The committee reviewed the forecasting methodology and studied the international best practices in cash distribution by other central banks. It made wide-ranging recommendations, notably:
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Process of Movement of Currency
Indian Rupee Notes are printed in four presses. The Security Printing and Minting Corporation of India (SPMCIL) has presses at Nashik in Maharashtra and Dewas in Madhya Pradesh. The other two are owned by RBI, through a subsidiary, Bharatiya Reserve Bank Note Mudran (BRBNML), at Mysuru, Karnataka, and Salboni in Bengal. Coins are made at four government-owned mints at Mumbai, Hyderabad, Kolkata and Noida. The RBI gets new currency notes from ‘four currency note printing presses’ and coins from ‘mints’.
Present Denominations of Bank Notes in India
Of late, notes in India are issued in the denomination of Rs 5, Rs 10, Rs 20, Rs 50, Rs 100, Rs 200, Rs 500 and Rs 2,000. These notes are called ‘bank notes’, as they are issued by the Reserve Bank of India. The printing of notes in the denominations of one rupee and Rs 2 has been discontinued. However, such notes issued earlier are still in circulation. The printing of notes in the denomination of Rs 5 had also been discontinued; however, it has been decided to reintroduce these notes so as to meet the gap between the demand and supply of coins in this denomination.
Where are the Indian Rupee Notes and Coins Made?