A currency chest is a depository of the Reserve Bank of India (RBI) where the excess money meant for the banks and ATMs is stored. These currency chests are located in the premises of the selected branches of the banks pan India. The money stored in the currency chests belongs to RBI while the money stored in the strong room belongs to the bank.
Significance of currency chests
The primary function of the RBI is to deliver currency notes across the country. Thus, in order to facilitate the distribution of banknotes across the country, the Reserve Bank of India has established currency chests in banks pan India. Whenever a new banknote is printed, it reaches the offices of the RBI and from there to the currency chests pan India. Thus, to distribute new currency notes, recycle old notes and keep cash reserves of the banks, currency chests come into play.
Where are currency chests located?
The currency chests are located in the premises of the selected branches of the banks but are administered by the apex bank. The representatives of RBI inspect these chests from time to time and maintain a record which they share with their senior officials.
How many currency chests are there in India?
As per the 2019-2020 Annual Report released by the Reserve Bank of India, there are a total of 3,367 currency chests and 2,782 small coin depots in the country.
| Category | Number of Currency Chests | Number of Small Coin Depots |
| State Bank of India | 1962 | 1689 |
| Nationalised Banks | 1180 | 908 |
| Private Sector Banks | 206 | 168 |
| Cooperative Banks | 8 | 7 |
| Foreign Banks | 4 | 3 |
| Regional Rural Banks | 6 | 6 |
| Reserve Bank of India | 1 | 1 |
| Total | 3367 | 2782 |
Source: RBI
Security arrangement for the currency chests
The security arrangements for the currency chests are made by the bank. However, the RBI reimburses the security and other expenses to the bank as per the norms including transportation cost from one bank to the other.
How is the loss recovered in case of theft?
As per the Reserve Bank of India (RBI), there are certain categories of loss. However, in cases of thefts, robberies and fraud from the currency chests situated within the bank premises, the bank is considered to be responsible and is liable to pay the loss of the currency chest. Also, the concerned bank files a Fraud Monitoring Report (FMR) with the RBI.
How currency and coins are circulated in the Indian economy by the RBI?
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