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RBI issues guidelines for setting up new currency chests

Date: 09 April 2019 Tags: Banking Laws & Regulations

Reserve Bank of India (RBI) has issued guidelines for banks to set up new currency chests. Currency chest is place where currency is stored. It is part of bank wherein currency notes and coins are stored. It can be strong room or a vault. When cash is taken out of vault, it becomes cash of bank and it can be used for the payments. RBI on its behalf authorises few selected bank branches to stock rupee notes and coins. It acts as distributives of RBI cash and enable RBI to take back soiled notes and mutilated notes from the public.

Guidelines are

  • Area of the strong room/vault of currency chests should be at least 1,500 sq ft. In case they are situated in hilly/ inaccessible places, them strong room/ vault area should be least 600 sq ft.
  • Processing capacity of new chests should of 6.6 lakh pieces of banknotes per day. If they are situated in hilly/ inaccessible places, it should then have processing capacity of 2.1 lakh pieces of banknotes per day.
  • Currency chests should have Chest Balance Limit (CBL) of Rs 1,000 crore. But this CBL will be subject to ground realities and reasonable restrictions, at discretion of RBI.

Background

As per RBI’s annual report of 2017-18, currency management infrastructure consists of network of 19 issue offices of RBI, 3,975 currency chest and 3,654 small coin depots of commercial, regional rural and co-operative banks spread across the country.