RBI asks banks to find alternative avenues for distribution of banknotes and coins
RBI asks banks to find alternative avenues for distribution of banknotes and coinsMumbai, Oct 10 (KNN) In furtherance of its decision to find alternative avenues for distribution of banknotes and coins, the Reserve Bank of India (RBI) today advised banks to explore the possibility of engaging entities for the purpose.
In a communication to heads of all scheduled commercial banks including regional rural banks (RRBs), “With a view to effectively meeting the growing demand for banknotes and coins in the country, there is a need for identification of alternative avenues for their distribution by banks. For this purpose, banks may explore the possibility of offering these services through Business Correspondents (BC) and consider engaging the services of Cash in Transit (CIT) entities for the purpose of distribution of banknotes and coins, thereby addressing the last mile connectivity issues,” the RBI said.
The central bank was referring to paragraph 110 of the Monetary Policy Statement 2013-14 - Distribution of Banknotes and Coins – Alternative Avenues.
The move is certainly pertinent as the common man finds it difficult to get currencies of different denominations as also coins. Local banks and ATMs do not offer choice with regard to banknotes.
Earlier in the month, in a circular the RBI has advised banks to explore the possibility of enlisting the services of BCs for carrying out the various currency management functions.
They were also asked to look into the feasibility of engaging the services of Cash in Transit (CIT) entities to distribute bank notes and coins. (KNN/ES)