A Currency Chest is a depository that belongs to the Reserve Bank Of India (RBI). The central bank stores excess money for banks and ATMs in such a Currency Chest. Such chests are held at the premises of select bank branches across India. Any money stored within a Currency Chest belongs to the RBI, and any money stored outside the chest in the bank belongs to the bank itself.
Significance Of Currency Chests
Currency Chest is the responsibility of the RBI to deliver currency notes to banks all over the country. The RBI has established the concept of a Currency Chest to facilitate the distribution of such currency all across the country at banks. Any new currency note printed in the country first reaches the office of RBI and, from there, through a Currency Chest to various banks in the country.
Thus, the main purpose of a Currency Chest is to distribute any new currency notes, recycle old currency and maintain adequate cash reserves at banks all over the country. The apex bank of India does the administration of a Currency Chest while they are maintained at the premises of select bank branches all over the country. Representatives of the RBI carry out regular inspections of such chests from time to time. They maintain relevant records of the same, which are then shared with senior officials at the bank.
Security Of A Currency Chest
Usually, the bank where the Currency Chest is kept makes arrangements to keep it safe. For this purpose, the bank obtains remittances from the RBI for security, transportation, and other expenses incurred. As per the criteria of RBI, any theft, robbery or fraud related to the storage of Currency Chests within a bank makes the bank responsible for the loss of the Currency Chest. While the concerned bank will subsequently file a Fraud monitoring report with the RBI in this situation, it will be held liable for the theft.
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Location Of Currency Chests In India
Currency Chests are located in banks, both private and government. There can be multiple Currency Chests in a city with multiple banks. Those banks that do not have a Currency Chest rely on other banks.
Current System Of Currency Distribution In India
With over 31 offices all over India, the RBI is entrusted with printing all new currency notes in the country. There are more than 4000 Currency Chests in the country, which receive money from the Reserve Bank as and when they are printed. Among the main activities, the chest is a cash movement, inward cash processing and vaulting.
RBI is the apex bank that has been entrusted with overseeing the printing of new notes. The bank makes recommendations regarding the same to the centre. Any new currency notes will pass through the Currency Chest and then into the financial chain of the economy.
FAQs on Currency Chest
Q.1. What is the system of Currency Chest audit?
An audit of a Currency Chest includes the appointment of an auditor duly appointed by the RBI to assess the effectiveness and functioning of the system of Currency Chests.
Q.2. Mention the latest case which has brought Currency Chests into the limelight.
Recently, a security guard robbed approximately INR 4.04 Crore from the Currency Chest at Axis Bank in Chandigarh.
Q.3. What is the role of a Currency Chest in the Indian currency system?
Due to their function, a Currency Chest facilitates a healthy economic system of producing notes circulated in the market for use by customers.
Q.4. Who is the owner of the money located in a Currency Chest?
The money in a Currency Chest belongs to the RBI.
Q.5. Does the RBI reserve the right to determine the number of coins to be minted and are they kept in the Currency Chest?
No, the Government of India determines the same, and they are not kept in a Currency Chest.