Recently, two cases of counterfeit currency were reported in Kochi, Kerala, after the Reserve Bank of India (RBI) detected fake notes in the State Bank of India (SBI) currency chest. A currency chest is a facility where the RBI stores money for banks and ATMs. Authorized scheduled banks, monitored by the RBI, establish these chests. They serve as cash distribution centers, providing new currency notes, accepting soiled or mutilated notes, and assisting banks with cash balances. Guidelines for setting up currency chests include minimum room sizes, processing capacities, and chest balance limits.
Facts/Terms for UPSC Prelims
- Currency Chest: Currency chests are facilities where the RBI stores money for banks and ATMs, monitored by the RBI. They serve as cash distribution centers.
- Scheduled Banks: These are banks that are listed in the Second Schedule of the Reserve Bank of India Act, 1934, and are eligible for specific privileges from the RBI.
- Soiled Notes: Currency notes that are damaged or unfit for circulation due to wear and tear.
- Mutilated Notes: Currency notes that are deliberately damaged or tampered with, making them unusable.
- Chest Balance Limit (CBL): The maximum amount of money that a currency chest is allowed to hold, subject to RBI regulations and practical considerations in specific regions.
