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as the Victoria Portrait series was withdrawn due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 George V series Republic of India

Hyderabad issues Indo-French issues Indo-Portuguese issues

Indo-British issue Mahatma Gandhi 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

Cupro- 9.00
Five rupees gms
23 mm Circular
Nickel
Cupro- 6.00 Eleven
26 mm
Two rupees Nickel gms Sided

Ferratic
4.85
Stainles gms
25 mm Circular
One rupees s Steel
Ferratic
3.79
Stainles gms
22 mm Circular
Fifty paise s Steel
Ferratic
2.83
Stainles gms
19 mm Circular
Twenty-five paise s Steel
Ferratic
2.00
Stainles gms
16 mm Circular
Ten paise s Steel
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
Patna
Bhopal

Salboni
Aham adabad Dew as
Calcutta
Calcutta
Nagpur
Mum bai Nasik Bhuaneshw ar

Fresh Notes/Coins
Mum bai
Byculla Hyderabad

from Press/Mint
Hyderabad

Press
Mysore Banglore pass on to the
Mint
Chennai banks/public only
Issue Offices
Trivandrum through RBI offices
– hence cross-
Agencies Involved
MOF
Police Railways

RBI's
RBI Presses

Govt
Presses

Mints Banks
(chests)
Flow of Notes & Coins
Public
NOTES COINS
Chest Chest branches &
branches RBI Offices

Publi
c
RBI 4 mint-linked RBI
Offices Offices

Presses 4 Mints
Distribution of Currency -Dimension (value)

250000 1992
1993
200000 1994
1995
150000 1996
1997
100000 1998
1999
50000 2000
2001
0 2002
Rs.2,448 billion, i.e.,
US $ 49 billion currently
Distribution of Currency – Dimensions (volume)

45000 1991
40000 1992
1993
35000
1994
30000 1995
25000 1996
20000 1997
15000 1998
10000 1999
2000
5000
2001
0
2002

41 billion pieces in
2002
Dimensions –
Enormous volume of lower denominations

% share of denominations
1000
0%
500
3% 1,2,5
19% 1,2,5
100
29% 10
20
50
100
10 500
50 30% 1000
20
17%
2%
Dimensions –
Too little value of the lower denominations

% share of denominations

1000
1,2,5 10 20
3%
1% 5% 1% 50 1,2,5
500 15%
28% 10
20
50
100
500
100 1000
47%
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
 Stock of soiled notes within RBI could be
destroyed releasing vault space
 Expeditious withdrawal of notes from chests
could be initiated
Breaking the impasse

Million pieces • Special methods

1200
announced enabling
1000 higher output in
800 processing
600 • Installation of
400
processing systems
(BPS 1060S) in 9
200
Offices
0 • Shredding &
2001 2001 2001 2002 2002
July Sept Nov Jan Mar 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-the-
art 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

Thank you