Itp On Indian Currency > Finalpppt I C

INDIAN CURRENCY

Presented by:RAHUL RANJAN & SUNIL KUMAR; FP UG TECH- 2, NIFT, NEW DELHI.

Currency : Unit of exchange. Currency zone : Region or country where the currency is dominant as medium of exchange. Facilitates trade between Different currency zones. Currency Management: RBI with Government of India

CURRENT DENOMINATIONS

HISTORY Weight of a Gunja seed = 1 ratti ~ 0.11 gm

Karshpana =32 ratti

Satamanas coins =100 ratti ~11 gm

First Indian coin Around 1500 BCE (source: Panini’s book)

Materials used in early days Clay, Stone, Plastic, Mineral, Leather Silver, Gold & Copper Nickel, Aluminum & Alloy Technology Manually & simple frame minting.

ANCIENT INDIAN CURRENCY

MODERN INDIAN COINS

History of Indian Paper Money BANKNOTE – form of currency used as a legal tender Paper money are Chinese origin Earliest issues of Paper rupees were those by the Bank of Hindostan (1770-1832), General Bank of Bengal and Bihar (1773-75), Bengal Bank (1784-91) Decimalisation of Indian rupee in 1957 First paper money was introduced in India by Sher Shah Suri

Different issues of Indian paper currency • Unifaced series- early notes stamped single side. • Commerce series- allegorical female figure personifying 'commerce'. printed on both sides. • Brittania series- late 1800s. • Portrait series- unifaced,i.e. victoria series. • Underprint series- unifaced ,introduced in 1867 as the Victoria Portrait series was withdrawn due to forgeries. • George V series- 1923 The Reserve Bank of India was formally inaugurated on Monday, April 1, 1935. Contd ...

• Republic of India Issues- after independence, firstly designed Rs.1 note. • Mahatma Gandhi series- 1996. • Jammu and Kashmir issues- watermarked paper in 1877 Maharaja Ranbir singh with 'Sun’ motif. • Hyderabad issues- British to accept in 1918. • Burma issues- 1938 after separation from india RBI. • Indo-French issues• Indo-Portuguese issues- used in their colonies. • Persian Gulf issues- East Africa, Southern Arabia and the Persian Gulf. • Emergency issues: World war scarity of coins.

Brittania series

Hyderabad issues

Indo-British issue

George V series

Indo-French issues

Mahatma Gandhi series

Republic of India

Indo-Portuguese issues

Princely states 1940

Elements Used for Coins Aluminium, Antimony, Carbon, Chromium, Cobalt, Copper, Gold, Hafnium, Iron, Lead, Magnesium, Manganese, Molybdenum, Nickel, Niobium, Palladium Platinum, Rhenium, Selenium, Silver, Tantalum, Tellurium, Tin, Titanium, Tungsten, Vanadium, Zinc & Zirconium. A Group 11 element is the series of elements in group 11 (IUPAC style) in the periodic table, consisting of transition metals which are the traditional coinage metals of copper (Cu), silver (Ag), and gold (Au). They are also known as the "noble metals."

Alloys Used for Coins--Acmonital, Aluminium Bronze, Argentan, Barton's Metal, Bath Metal, Bell Metal, Billon, Brass, Bronze, Crown Gold, Cupro-nickel, Dow metal, Electrum, Franklinium, German Silver, Gun Metal, Manganese Bronze, Nickel Brass, Nickel Silver, Nordic Gold, Orichalchum, Pewter, Pinchbeck, Potin, Silver Alloys, Speculum, Stainless Steel, Steel, Tombac, Virenium & White Metal.

Non-metals Used for Currency

Carbon, Clay, Fibre, Glass, Leather, Paper, Plastic, Porcelain, Selenium, Stone.

Denomination

Metal

Weight

Diameter

Shape

CuproNickel

9.00 gms

23 mm

Circular

Two rupees

CuproNickel

6.00 gms

26 mm

Eleven Sided

4.85 gms

25 mm

Circular

One rupees

Ferratic Stainles s Steel

3.79 gms

22 mm

Circular

Fifty paise

Ferratic Stainles s Steel

2.83 gms

19 mm

Circular

Twenty-five paise

Ferratic Stainles s Steel

2.00 gms

16 mm

Circular

Ten paise

Ferratic Stainles s Steel

Five rupees

Value: Rs 10 Size: 137mm x 63mm Equivalent To: 0.25 US$ Years Of Circulation: 1997 Onwards Value: Rs 50 Size: 147mm x 73mm. Equivalent To: 1.25 US$ Years Of Circulation: 1997 Onwards Value: Rs 100 Size: 157mm x 73mm Equivalent To: 2.50 US$ Years Of Circulation: 1997 Onwards Value: Rs 500 Size: 167mm x 73mm Equivalent To: 12.50 US$ Years Of Circulation: 1997 Onwards

SECURITY PRECAUTION

DESIGN PRESPECTIVE

ELEMENT OF DESIGN IN INDIAN CURRENCY Colours Shapes, lines & motifs

Pattern, design and collages

MECHANISM & FUNCTIONING ‰Printing process ‰ Lithography ‰Original Raised Ink ‰Counterfeiting ‰Paper Quality ‰Numbering ‰Intaglio/Engraving ‰Refunding of damaged notes & reproduction

Ordinary notebook paper is made from the intermeshed cellulose fibers of wood pulp. The cellulose fibers absorb water and come apart (dissolve) when they are soaked in water. Paper money is made from textile (rag) fibers, such as cotton and linen. Intermeshed "rag" fibers bond together more firmly and don't separate (dissolve) in water. These fibers are much more durable than the cellulose fibers from wood pulp.

Process of making of a Coin • Blanking • Annealing, Washing & Drying • Upsetting •

Striking

• Inspecting •

Counting & bagging

Cross-movement of Currency Chandigarh

Noida New Delhi Jaipur

Lucknow

Guw ahati Kanpur Bhopal Ahamadabad

Patna Salboni

Dew as

Calcutta Calcutta Nagpur Mumbai

Nasik

Bhuaneshw ar

Mumbai Byculla

Hyderabad

Hyderabad

Press Mysore

Banglore

Chennai

Trivandrum

Mint Issue Offices

Fresh Notes/Coins from Press/Mint pass on to the banks/public only through RBI offices – hence crossmovement

Agencies Involved MOF R a ilw a y s

P o lic e

RBI

R B I's P resses

G ovt P resses

M in ts

Banks (c h e s ts )

Flow of Notes & Coins Public NOTES

COINS

Chest branches

Chest branches & RBI Offices Public

RBI Offices

Presses

4 mint-linked RBI Offices

4 Mints

Distribution of Currency -Dimension (value)

250000 200000 150000 100000 50000 0

Rs.2,448 billion, i.e., US $ 49 billion currently

1992 1993 1994 1995 1996 1997 1998 1999 2000 2001 2002

Distribution of Currency – Dimensions (volume)

45000 40000 35000 30000 25000 20000 15000 10000 5000 0

41 billion pieces in 2002

1991 1992 1993 1994 1995 1996 1997 1998 1999 2000 2001 2002

Dimensions – Enormous volume of lower denominations % share of denominations 500 3%

1000 0% 1,2,5 19%

100 29%

50 17%

20 2%

10 30%

1,2,5 10 20 50 100 500 1000

Dimensions – Too little value of the lower denominations % share of denominations 1000 3% 500 28%

1,2,5 10 1% 5%

20 1%

100 47%

50 15%

1,2,5 10 20 50 100 500 1000

Network of Currency Chests • RBI is located only in 18 places for currency operations • Distribution of notes and coins throughout the country is done through designated bank branches, called chests • Chest is a receptacle in a commercial bank to store notes and coins on behalf of the Reserve Bank • Deposit into chest leads to credit of the commercial bank’s account and withdrawal, debit

More on Currency Chest • Meets currency requirement of public • Withdraws unfit notes • Exchange facility from one denomination to another • Payment requirement of the Government • Exchange of mutilated notes • Avoids frequent movement of cash • Chest branch operates with minimum cash balance

Currency Chest Mechanism • Net deposit /withdrawal of notes and coins at the chest is reported on daily basis to parent Issue Office • Overall deposit or withdrawal leads to credit or debit of bank’s account in RBI • Net withdrawal from chests means expansion of currency and deposits means contraction • Notes in circulation being the liability of RBI, it adjusts its asset-liability position centrally for such expansion or contraction

Movement of Treasure • Specially built trucks for short distance (journey completed during the day) • Railways for long distance • Guarded by police • Remittance accompanied by officials of RBI to chests • Further movement from chest to a branch done by the bank concerned

How much to print & mint • • • • •

Incremental needs Replacement needs Reserve Needs Statistical analysis and long-term forecast Printing/minting allocated between the presses/mints and delivery schedule decided in advance

Capacity of Presses & Mints • • • •

Total annual capacity of Presses: 18 bn Can print up to 28 bn with two shifts Total minting capacity: 4,700 mn RBI’s annual needs: – Notes: about 12,000 mn pieces – Coins: about 5,000 mn pieces

Challenges of Distribution • Size of the country and volume of currency • Security and availability of railway wagons when required • Political boundaries defining jurisdiction of Issue Offices lead to sub-optimal logistics • Cross movement of currency is unavoidable

Contd …

• Security- police is preoccupied with other activities of priority • Private security is unavailable and not favoured • Transport through railways involves enormous coordination of logistics • Privatization of transport – introduced recently in respect of coins only

Supply Bottleneck • Scarce Printing capacity for over a decade till 1999 – Pace of replacement of old currency was slow leading to deteriorating quality – Inefficiencies in arranging return flow of notes as chests hardly sorted notes as fit/unfit – Temporary respite through imports in 1997-98 (3.6 bn pieces)

Problem of plenty - the present transition • Enough printing capacity since 1999 • Governor announces clean note policy • All RBI offices receive enough fresh note supply; vaults full with old and new notes • Chests overflowing with soiled/unsorted notes • An apparent impasse

Breaking the impasse • Capacity to process and destroy notes in RBI needed to increase so that ƒ Stock of soiled notes within RBI could be destroyed releasing vault space ƒ Expeditious withdrawal of notes from chests could be initiated

Breaking the impasse

Million pieces 1200 1000 800 600 400 200 0

2001 July

2001 Sept

2001 Nov

2002 Jan

2002 Mar

• Special methods announced enabling higher output in processing • Installation of processing systems (BPS 1060S) in 9 Offices • Shredding & briquetting in all offices

Coin Distribution – Some new steps • Mobile van at city centres • Distribution through milk cooperatives in the state of Gujarat • Through Post Offices in rural areas – a beginning made in Maharashtra • Coin dispensing machines in public places and bank branches • Issue of notes of lower denominations to bulk users by RBI is compulsorily accompanied by issue of some part in coins

Early results • Clean Note Policy made a success • Currency processing systems have stabilized in operation • Modernization of mints show results • Import of coins and temporary printing of Rs.5 notes has improved the supply position

Meeting the challenge of distribution • The volume should be contained within sustainable levels by – Shift in printing from lower to next higher denominations (a perceptible shift already visible) – Coinise Rs.10 denomination – Try out other substrate for printing – coating of paper or polymer, although currently there is no plan to introduce polymer notes. • Banks have been compelled to dispense with the age-old practice of stapling of notes • Sorting of notes to get decentralized through banks or processing centres

FUTURE ASPECT & TECHNOLOGICAL ADVANCEMENT • The existing note printing presses and the mints owned by the Government are being modernised. • Two new currency printing presses with the state-of-theart technology have been set up under the aegis of the Bharatiya Reserve Bank Note Mudran Ltd., a wholly owned subsidiary of the Reserve Bank. • To bridge the demand-supply gap, the Government had, as a one-time measure, even imported bank notes. • The production capacity of the four India Government Mints are being augmented. • Government of India has also been importing rupee coins to supplement the supply of coins from the four mints. Till date 2 billion rupee coins have been imported.

• The various Mints in the country have been modernised and upgraded to enhance their production capacities. • Government has in the recent past, imported coins to augment the indigenous production. • Notes in denomination of Rs.5 have been reintroduced to supplement the supply of coins. • New initiatives for distribution • Coin Dispensing Machines have been installed at select Regional Offices of the Reserve Bank on pilot basis. • Dedicated Single-window counters have been opened in several of the Reserve Bank's offices for issuing coins of different denominations packed in pouches. • Mobile counters are being organised by the Reserve Bank in commercial and other important areas of the town where soiled notes can be exchanged for coins.

ENVIRONMENTAL ROLE UNITY TRADE EXCHANGE

TECHNOLOGICAL ADVANCEMENT WIRELESS REMOTE MONITORING COIN READER MACHINE ADVANCED PRINTING AND MINTING MACHINES ATM’s CURRENCY (NOTE) COUNTING E-TOKENS/E-CHEQUES ADVANCED SECURITY FEATURES COUNTERFEIT DETECTOR PEN

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