To improve the distribution of coins among members of the public, The reserve Bank of India (RBI) is preparing a pilot project on QR-based coin vending machine (QCVM) in collaboration with a few leading banks.
What is QCVM?
“The QCVM is a cashless coin dispensation machine which would dispense coins against a debit to the customer’s Bank account using Unified Payments Interface (UPI).”
RBI Governor Shaktikanta Das said while announcing additional measures along with this monetary policy statement on Wednesday. Customers will also have the option to withdraw coins in the required quantity and denomination in QCVMs.
Unlike cash based traditional coin vending machine, the QCVM would eliminate the need for physical tendering of banknoted and their authentication.
Where it will be launched?
“The pilot project is planned to be initially rolled out at 19 locations in 12 cities across the country. These vending machines are intended to be installed at public places such as railway stations, shopping malls, marketplaces to enhance ease and accessibility,” Mr. Das said.
This will enchane the ease of accessibility to coins. Based on the learnings from the pilot tests, guidelines would be issued to banks to promote better distribution of coins using QCVMs.
Why RBI is doing this?
Getting fake currency notes in coin vending machines led the Reserve Bank to announce the unified payment system – based alternative, Deputy Governor T. Rabi Sankar said on Wednesday.
Sankar said the RBI has installed coin vending machines at strategic places like vegetable market where there is a high demand for coins but had to grapple with the challenge of fake notes.
“The problem then was that the currency that was being fed into these machines was found to be very often fake, so that become an issue” he told reporters at the central bank headquarters. This is were the RBI started to think of the alternatives that can be deployed, Sankar said,
Adding that a lot of people use cellphones which can scan a QR code which can be linked to the UPI to initiate and process a transaction sans the use of currency notes. The machine was developed in – house and a pilot project was launched, which is now being expanded, Sankar said, adding that the newly announced project will improve the distribution of coins in the system.
Problem of storage
Sankar said the RBI is saddled with a peculiar problem wherein the supply of coins is very high and it takes a lot of storage place, the same is not properly distributed and many places are in the lurch of the coins.
Coin circulation in India
The Government of India has the sole right to mint coins. The responsibility of coinage vests with the government of India in terms of the Coinage Act,1906 as amended from time to time. The designing and minting of coins in various denominations is also the responsibility of the Government of India. Coins can be issued up to the denomination of Rs.1000 as per the Coinage Act, 1906.
The coins are issued for circulation only through the Reserve Bank in terms of the RBI act. Coins are minted at the four India Government Mints at Mumbai, Alipore (Kolkata), Saifabad (Hyderabad), Cherlapally (Hyderabad) and Noida(UP).
Coins are received from the mints and issued into circulation through its regional issues/sub offices of the Reserve Bank and a wide network of currency chests and coin depots maintained by Banks and Government treasuries spread across the country.