The Reserve Bank of India (RBI) issued the guidelines for banks to set up new currency chests. The area of the strong room or vault of the new currency chest shall be of at least 1500 square feet. India was positioned as the world’s top recipient of remittances with its diaspora sending USD 79 billion back home in 2018, as per World Bank.
Story1: RBI issues norms for banks to set up Currency Chests
The Reserve Bank of India (RBI) on April 8, 2019 issued “Minimum Standards for a Currency Chest”, the guidelines for banks to set up new currency chests.
What do you mean by Currency Chests?
The Currency Chests are part of banks wherein currency notes and coins are stored. The currency chests can be a strong room or a vault. When the cash is taken out of the vault, it becomes bank's cash and is used for the payments.
The RBI has authorised few branches of selected banks to stock rupee notes and coins on its behalf. The vault of the Currency Chest which stores cash belongs to RBI.
The responsibility for managing the currency in circulation is vested in the RBI.
Have a look at the guidelines:
• The area of the strong room or vault of the new currency chest shall be of at least 1500 square feet.
• For the banks situated in hilly or inaccessible locations as defined by Government, the minimum area of the strong room shall be 600 square feet.
• The currency chests should have a processing capacity of 6,60,000 pieces of banknotes per day.
• For banks situated in the hilly and inaccessible places, the processing capacity shall be 2,10,000 pieces of banknotes per day.
• The currency chests shall be open to accept automation and adaptability to implement IT solutions
• The new chests shall maintain Chest Balance Limit (CBL) of Rs 10 billion, subject to ground realities and reasonable restrictions at the discretion of the Reserve Bank.
Committee on Currency Movement
The RBI had in 2016 constituted a ‘Committee on Currency Movement’ (CCM) chaired by DK Mohanty.
The Committee recommended that the Reserve Bank should encourage banks to open large Currency Chests (CCs) with modern facilities and minimum Chest Balance Limit (CBL) of Rs 10 billion (Rs 1,000 crore).
Accordingly, the RBI came out with these minimum standards for setting up currency chests.
As per the RBI's Annual Report 2017-18, the currency management infrastructure consists of a network of 19 issue offices of the Reserve Bank, 3975 currency chests and 3654 small coin depots of commercial, co-operative and regional rural banks spread across the country.
Story 2: India highest recipient of remittances in 2018 with USD 79 billion: World Bank
India was positioned as the world’s top recipient of remittances with its diaspora sending USD 79 billion back home in 2018, according to the World Bank’s latest Migration and Development Brief.
India managed to retain its top spot in remittances by registering a significant flow of remittances from USD 62.7 billion in 2016 to USD 65.3 billion 2017 and to USD 79 billion in 2018, a significant growth over the last three years.
The remittances in 2018 grew by over 14 percent in India, where natural disasters like Kerala floods likely boosted the financial help that migrants sent to their families.
Highlights of the Migration and Development Brief
• The remittances to low-and middle-income countries reached a record high of USD 529 billion in 2018, an increase of 9.6 percent from USD 483 billion in 2017.
• Global remittances, including flows to high-income countries, reached USD 689 billion in 2018, up from USD 633 billion in 2017.
• The top remittance recipients were India with USD 79 billion, followed by China (USD 67 billion), Mexico (USD 36 billion), the Philippines (USD 34 billion), and Egypt (USD 29 billion).
• In Pakistan, remittance growth was moderate at 7 percent due to significant declines in inflows from Saudi Arabia, its largest remittance source.
• In Bangladesh, remittances showed a rapid increase in 2018 with growth of 15 percent.
• Remittances to South Asia region grew 12 percent to USD 131 billion in 2018.
• Remittances to the East Asia and Pacific region grew around 7 percent to USD 143 billion in 2018.
• Remittances to Europe and Central Asia grew by 11 percent to USD 59 billion in 2018.
• Remittances flows to Latin America and the Caribbean grew 10 percent to USD 88 billion in 2018, supported by the strong US economy.
• Remittances to the Middle East and North Africa grew 9 percent to USD 62 billion in 2018.
• Remittances to Sub-Saharan Africa grew around 10 percent to USD 46 billion in 2018.
• Banks were the most expensive remittance channels, charging an average fee of 11 percent in the first quarter of 2019.
• The overall increase in remittances regionally was driven by a stronger economy and employment situation in the United States and outward flows from few Gulf Cooperation Council (GCC) countries and the Russian Federation.