Topic: Indian Economy and issues relating to planning, mobilization of resources, growth, development and employment.
5) What do you understand by Currency chest? Discuss its need and significance in the context of Indian economy.(250 words)
why this question:
Recently The Reserve Bank of India came out with guidelines for banks to set up new currency chests. Thus it is important for us to understand the significance of currency chests in Banking system.
Key demand of the question:
The answer must discuss in detail what are currency chests , its need and significance in the banking system.
Discuss – This is an all-encompassing directive – you have to debate on paper by going through the details of the issues concerned by examining each one of them. You have to give reasons for both for and against arguments.
Structure of the answer
write a few introductory lines about the recent move by RBI.
Answers must discuss in detail the following points :
- What are Currency chests? – Currency chests are branches of selected banks authorized by the RBI to stock rupee notes and coins.
- Role of currency chests.
- Significance of recent guidelines –
- Area of the strong room/ vault of at least 1,500 sq ft. For those situated in hilly/ inaccessible places, the strong room/ vault area of at least 600 sq. ft.
- The new chests should have a processing capacity of 6.6 lakh pieces of banknotes per day. Those situated in the hilly/ inaccessible places, a capacity of 2.1 lakh pieces of banknotes per day.
- The currency chests should have Chest Balance Limit (CBL) of Rs 1,000 crore, subject to ground realities and reasonable restrictions, at the discretion of the Reserve Bank.
Conclude with significance of currency chests.