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Wednesday, September 2, 2009

RBI to ensure regular supply of fresh bank notes

Besides examining options to enhance the life of bank notes, the Reserve Bank of India has initiated a multi pronged approach involving regular supply of fresh bank notes, speedier disposal of soiled bank notes and extended mechanisation of cash processing activity to ensure that good quality bank notes are in circulation in the system.
The Bank has in its Annual Report stated that during 2008-09, the value of bank notes increased by 17.1 per cent and by 10.7 per cent in volume terms.
The total supply of bank notes by the Bharatiya Reserve Bank Note Mudran (P) Ltd during 2008-09 (July-June) was 8,501 million pieces as compared with 8,488 million pieces during 2007-08.
The Government-owned Security Printing and Minting Corporation of India supplied 5,160 million pieces of notes in 2008-09 compared with 5,442 million pieces in 2007-08.
“The challenges to managing currency have increased over time given the expansion of the economy and the growing needs for bank notes, the task of currency management has become increasingly complex,” the report notes. The report also took note of the decline in the share of currency in broad money in 2008-09 from 39.7 per cent as at end-March 1971 to 16 per cent in 2001 and gradually thereafter to 14 per cent as at March 2009, reflecting financial deepening, increased use of credit and debit cards and liquid financial markets.
Notwithstanding the decline in the share of currency in broad money, detection of counterfeit bank notes was observed to be on the rise. A total of 3,98,111 counterfeit bank notes were detected at the Reserve Bank’s offices and bank branches during 2008-09 compared with 1,95,811 in the previous year.


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