PPT and PDF 1. RBI's New Nationwide Currency Logistics Framework _ What Mint Road, which manages India's currency, has upgraded its systems, resulting in fewer currency storage facilities called currency chests (CC). + These chests, where banks keep cash, decreased from 3,812 in FY19 to 2,838 in FY23. Similarly, the number of coin depots also fell from 3,519 to 2,293. Tell me more Background: The RBI revamped its systems in FY19, making storage units bigger. + Now, currency chests must hold a minimum of Rs 1,000 crore in a strong room of 1,500 square feet, especially in hilly or remote areas. + The amount of cash in CCs was placed at a minimum of Rs 1,000 crore and was to be housed in a 1,500 sq ft strong room in hilly and inaccessible places. The strong room was to be at least 600 sq ft Although there are fewer currency chests now, the amount of cash circulating in the country has increased. This increase in cash circulation is happening alongside the rise of digital payments like UPI. RBI's new nationwide currency logistics framework: The RBI is testing a new cashless system called QR code-based Coin Vending Machine (@CVM) with 5 banks, these banks are 1. Axis Bank 2. Bank of Baroda3. ICICI Bank 4. State Bank of India 5. Federal Bank. The QCVM is a cashless coin dispensation system which allows payment transactions through UPI on scanning a QR code generated by the machine on the mobile phone of the customer. Unlike cash-based traditional coin vending machines, the QCVM eliminates the need for physical tendering of banknotes. In @CVMs, customers can withdraw coins in required quantities and denominations. + This machine allows customers to withdraw coins using their mobile phones and UPI, eliminating the need for physical cash transactions. + Overall, the RBI's efforts to modernize its cash-handling system aim to make transactions safer and more efficient. Despite the growth of digital payments, cash is still widely used, especially in areas where online payments aren't as common. UPI-led Retail Digital UPI-led Retail Digital Year Payments (Volume Payments (Value Growth os to GDP Ratio Growth %) %) ° FY17-FY22 50% 27% 14.4% People still prefer using cash for transactions for several reasons: 1. Low Interest Rates: With interest rates on savings accounts and other investments being low, there's less incentive for people to keep their money in the bank. 2. Precautionary Savings: During uncertain times, people tend to hold onto cash as a precautionary measure in case of emergencies or unforeseen expenses. 3. Informal Economy: A significant portion of economic activities in many countries happens outside the formal banking system. Cash is preferred in these transactions due to its convenience and anonymity. 4, Government Benefits: Many government welfare programs and benefits are distributed in cash. This encourages people to use cash for their day-to-dayexpenses. The growth of using cash This growth has led to more people choosing cash-on- delivery (CoD) for their online purchases. In the financial year 2022, CoD accounted for more than 60% of all online payments. In smaller towns, CoD makes up 70% of all payments, and in the smallest cities, it's as high as 90%. This shows that cash is still very important for many people, especially outside big cities. Location CoD Share of Online Payments (%) Overall (FY 2022) >60 Smaller Towns 70 ‘Smallest Cities 90 ‘Safe and secure + RBI issues, manages currency through 19 offices, currency chests, small coin depots + The value and volume of banknotes in circulation increased by 7.8% and 4.4%, respectively, in FY23 + In 2019, RBI increased the currency chest balance limit to at least Rs 1,000 cr + The currency chest had to be in a 1,500 sq ft strong room + Chests were to have processing capacity of 66,0000 notes daily Relatable chapter: Functions of RBI, Recent Development in Financial market Relevance of the fact: This is a n important news as RBI is trying to make an update in the financial market. This is one of the significant majors, you must remember its name, its use and who is introducing this, and what are effects of this introductions? 2. RBI to set up DIGITAPer What Recently, RBI planned to establish the Digital India Trust Agency (DIGITA) to stop the increase of illegal lending apps. This planning is the part of to efforts to curb growing cyber fraud. <- Why The proposed agency will enable verification of digital lending apps and maintain a public register of verified apps. + A thorough verification process would help instil greater transparency and accountability within the growing digital lending sector, which has witnessed a surge in fraudulent activities and unscrupulous practices in recent times. Tell me more Apps not carrying the ‘verified’ signature of DIGITA should be considered unauthorised for the purpose of law enforcement. + This will serve as a pivotal checkpoint in the fight against financial crimes in the digital realm. + DIGITA, once in place, would be entrusted with the responsibility of monitoring digital lending apps. The search giants (like google) have changed their policy regarding the enforcement of loan apps on the PlayStore. + Only those apps are allowed which are published by the RBI's regulated entities (REs) or those working in partnership with REs. + The RBI has shared a list of 442 unique digital lending apps with the IT Ministry. + Besides, Google has removed over 2,200 digital lending apps (DLAs) from its app store from September 2022 to August 2023. PorRelatable chapter: Fintech, Funding of loans , Recent developments in Financial market Relevance of the fact: This is an important news, any initiative taken by the RBI to improve and develop the financial market is important. You must remember the agenda and the name of the agency also. 3. RBI's Story > What The RBI recently celebrated its 90th birthday on April 1st. It's one of the oldest central banks in the world. This article is a very interesting article, it lays out some simple facts related to RBI and other central. Let's start! Tell me more Birth dates of different central banks of different countries: + 1668: The Swedish Riksbank was set up as a joint stock bank, chartered to. lend government funds and act as a clearing house for commerce. This marked the birth of central banking. + 1694: the Bank of England was founded, also as a joint stock company, to purchase government debt. + 1800: Napoleon Bonaparte set up Banque de France to stabilise the currency after the hyperinflation of paper money during the French Revolution. + 1812: The Bank of Finland was established soon after Russia took over Finland from Sweden to become a grand duchy. + 1882: In Asia, while the Bank of Japan was founded in 1882, the People’s Bank of China is 13 years younger than the RBI. + 1913: The US Federal Reserve made its appearance in 1913 - seven years after the Swiss National Bank.* 1935: The RBI began operations on April 1, 1935, as per the RBI's Act, 1934. The central office was initially in Kolkata, but was moved to Mumbai in 1937. The RBI was nationalized by the Government of India on January 1, 1949, and became the central bank of India. + 1998: Finally, the current European Central Bank was set up in 1998 to launch the Euro, a decade after the decision was taken to build an economic and monetary union. Evolving functions of Central banks: The activities of central banking have been evolving over centuries: For example: Before the 1st World War broke out in 1914, central banks didn’t attach great importance to maintaining the domestic economy's stability. + The war brought some concerns related to the employment, real activity, and the price level. After the Great Depression, again, the contours of central banking changed. The Federal Reserve (the Fed) used to be under the control of the Treasury Department. However, it gained back its freedom from Treasury control in 1951. RBI's Governor and their tenure- who has the longest and shortest tenure at RBI? Governor Start Date End Date Duration Benegal Rama Rau July 1, 1949 January 14,1957 Over 7.5 years Amitav Ghosh January 15,1985 February 4,1985 20 days. KG Ambegaonkar January 14,1957 February 28,1957 6 weeks BN Adarkar May 4, 1970 June 15, 1970 6 weeks Bimal Jalan November 22, 1997 September 6, 2003 Over 5.5 years SVenkitaramanan December 1990 December 1992-2 years YV Reddy September 2003 September 2008 5 years. Urjit Patel September, 2016 December 2018 —2.3 years approx. ShaktikantaDas December 11,2018 Currently working 5.5 YearsPer ‘and POF governor from Sep 16, 1982, 0 Jan 14,1985, went on to become the finanes minister ofthe country and then Prime Minister (2004-14) THE JOURNEY nip 395: Gonens option ‘nv: ogni tsa ‘hme tom atnsins Goad Tepe apn ‘niet sarrepusenge- Cpectietonis ‘mis marr natolied mr: Forgn change epson at 95 cme Toe tonenetoee Umgrrknenetett monet December this year lnvotueste const 2,45 f9es;sceryonnite seapioreiewneringethe par tov umletnete Bolen. ise oto oan Seccigioth ee ‘onthe Poyments se pesos ta caesar Somstd onew bane 19 land ermet t speetlaathe send sthe | Totuy ttm arena haktikanta Das — the 2Sth governor ‘of BI—issetto become the longest: serving governor in seven decades ‘once he completes his second term in ences endreaonss: reneiten cal det sop cles nde et, (Bidston ch Fain aang naagemest a reper etter spoons se rotinemadonknepvaenes ise soot: beaneseltorpamers daemon ‘tron: tronerbokarsied erseeose ser: bakane ee est up pamentankand 12018, UrjitPatel became the rst governor toresign in 43 years, possibly over differences with the government regarding the BYssurplas distribution notre tint ey panne staph ctesinel senorita abi Ubctmoney malig tong Incrten sone ‘naa ane sen on ‘nam flsorestiaton mane ftetine Surspietreatbnk aigataunenyPer Bengal Rama Rau Sir Benegal Rama Rau, a member of the Indian Civil Service, was the longest serving Governor of the Bank. Prior to joining the Bank he served as the Indian Ambassador to the United States. His tenure witnessed the commencement of the Planning Era as well innovative initiatives in the spheres of co- operative credit and industrial finance. The recommendations of the Alll India Rural Credit Survey Committee appointed during his tenure led to the transformation of the Imperial Bank of India to State Bank of India. The proportional reserve system of note issue was replaced by a minimum reserve system to give the Bank greater flexibility. He resigned in the middle of January 1957 before his second extended term of office expired due to differences with the Finance Minister. Fact: Of the 8 RBI governors who have held office since the 1991 economic liberalisation, Bimal Jalan had the longest stint and S Venkitaramanan, the shortest. Current Governor Shaktikanta Das will overtake Jalan before completing his second term in December Current governor and challenges he faced? Shaktikanta Das faced perhaps the most daunting challenges. As an IAS officer of the Tamil Nadu cadre from the 1980 batch, Das took the helm amidst the ambitious goal of propelling the Indian economy to a $5 trillion mark. + However, this aspiration was derailed by the onset of the COVID-19 pandemic in 2020, plunging the nation into a recession. + Das responded by implementing historic interest rate cuts, injecting liquidity into the system, and employing unconventional measures to fight the crisis,Future outlook: Growth projections for FY25 are likely to remain around 7%, with cautious optimism prevailing amidst concerns over food inflation and the role of the monsoon. Relatable chapter: Functions of RBI, Regulatory bodies Relevance of the fact: See this is an interesting article where you'll get to know some interesting facts about the RBI. Though there is no guarantee that whether there will be a questioned based on this or not. But you can read this, and put this into factual information under RBI.