• Notes are printed by Reserve bank of India whereas coins are minted by Government of India.
• The basis of printing notes by RBI is/are:
Additional need of money
Need for reserves required under law.
Need for replacing the old, mutilated, torn etc.notes in the market.
Based on the futuristic needs (forecasting needs)
• Coins and Rupee one note is signed by the Secretary (Finance), Government of India whereas all other denominations of notes like rupee 5,10,20,50,100,500 and 1000 are signed by the Governor of Reserve Bank of India.
• RBI has directed Banks not to staple any currency notes instead the bundle (s) should be tied or secured by paper band or rubber band.
• While maintaining cash, branches use “clip system”. Clip system is the mode of verification of cash.
• For printing of the Indian currency specially produced paper from 100 per cent cotton. Cotton is used because it gives natural whiteness, provides lengthy fibers that provide strength, currency notes are crisp and cotton can withstand many folding.
• Normal strength of cotton used in paper currency is around 6000 to 7000 folds whereas international standard / parameter is around 6000 folds.
• Security thread in paper currency is:
Metallic or plastic thread that can’t be photocopied,
Thread is woven inside the note, and
Thirdly thread gives a blue look under the ultra violet lamp (UV lamp)
• All currency distributed in the economy is a liability.
• Normally mutilated note means the one which has a missing piece and /or note composed of pieces.
• Notes issued by the Controller of currency before 1935 (before the establishment of RBI) are called currency notes.
• Bank Note is a promissory note payable to the bearer and issued by RBI on demand
• The form of approved assets that RBI ensures before currency notes are issued include Government Rupee and foreign security of any maturity, bullion and gold coins and rupee coin and eligible promissory notes and bills of exchange that are payable in India and purchasable by RBI.
Cash factory in Lucknow
India’s largest lender State Bank of India (SBI) launched its first Currency Administration Branch (CAB), an exclusive branch to handle currency notes in Lucknow. Also known as cash factory, CAB is part of the bank’s plan to open one currency chest in every city that will distribute notes and rupee coins to the local banks and ATMs, apart from identifying counterfeit currencies.
The cash factory will be the nodal point for issuing currency notes to all local SBI branches as well as ATMs. About half a dozen sophisticated note sorting machines will sort out currency notes in four varieties in the branch office.