THE JOURNEY OF MONEY

THE JOURNEY OF MONEY

With the passing of almost a year after the demonetisation of rs1000 and rs500 currency notes in the country, the immediate effects are settling down. Let us take a look at the journey of currency in our country right from estimation ,printing to our pockets.

How It All Starts:

Before the beginning of each financial year, RBI makes a projection of the requirement of currency notes, taking into account circulation of notes, GDP growth, use of electronic payments, etc.Data are collected from the central bank’s 19 regional offices, after which a decision is taken on the currency to be allocated to each office-and remittances are generally made quarterly. This is discussed with the government and orders placed with the presses.

The Material:

Based on the estimate of currency needed, an indent or order is placed with the country’s four currency note printing presses,with  clear instructions on denominations and numbers of notes each would print. Two  presses in Nashik  and Dewas, are controllrd by the government; the other two, at Mysuru and Salboni in West Midnapore district some 150 km from Kolkata, are run by Bhartiya Reserve Bank Note Mudran(P) Ltd, an RBI subsidiary. While the presses run through the year, the placing of an indent sets a particular cycle in motion.The high –security banknote paper is designed,produced and supplied by currency paper mills in Mysuru and Hoshangabad, which can together produce 18000 metric tonnes of note paper annually. Banknote paper can also be imported.

The Security:

Some embedded security features , such as multitonal, three-dimensional watermark, micro lettering and security threads are incorporated in Mysuru and Hoshangabad. An R&D team works constantly to review and improve security features. After the security paper has been readied, it is transported to the four note printing presses where additional security features  like the optically variable ink, reflecting various colours, are added . The paper is transported in sealed containers as it is ready.

The Printing:

The notes are printed in sheets. Each sheet can accommodate 40 notes of the new rs. 2000currency. Once printed the notes are telescopically numbered and cut. There are 100 notes in a packet, and 10 packets make a bundle. The presses can run extra shifts to meet the demand if needed. Printed notes are despatched to vaults in over 19 offices of the RBI countrywide. For places not serviced by these offices, another 4,000 currency chests operate like vaults, guarded with state-of-the-art security systems, including CCTV cameras and concertina wire. There are also over 3700 small coin depots at commercial banks, and co-operative and regional rural banks across the country. The RBI keeps a daily record of stock positions and transactions undertaken at the currency chests through a currency accounting system.

The ATMs and Travel:

Railway Wagons and trucks are used to transport the currency, with armed police security provided by the states. Helicopters or aircraft are sometimes requisitioned to reach currency to far corners of the country such as parts of the Northeast and Jammu& Kashmir. It is important to note that even after the money has reached the RBI’s vaults or currency chests, it is technically just paper. For banknotes to become legal tender, the RBI must prepare a voucher . The next major task really , is not to reach the currency to bank branches, but to fill up ATMs- which number over 2.21 lakh currently. Some 8800 cash vans of 7 registered cash logistics firms carry money to these ATMs.