Why in News?

  • The Reserve Bank of India (RBI) has issued guidelines for banks to set up new currency chests.

The guidelines:

  •  Area of the strong room/ vault of at least 1,500 sq ft. The new chests should have a processing capacity of 6.6 lakh pieces of banknotes per day. Those situated in the hilly/ inaccessible places, a capacity of 2.1 lakh pieces of banknotes per day. The currency chests should have Chest Balance Limit (CBL) of Rs 1,000 crore, subject to ground realities and reasonable restrictions, at the discretion of the Reserve Bank.

Currency chests and its role:

  • Currency chests are branches of selected banks authorised by the RBI to stock rupee notes and coins. The responsibility for managing the currency in circulation is vested in the RBI
  •  The RBI offices in various cities receive the notes from note presses and coins from the
    mints. These are sent to the currency chests and small coin depots from where they are distributed to bank branches. The RBI has set up over 4,075 currency chests all over the country. Besides these, there are around 3,746 bank branches that act as small coin depots to stock small coins.
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