Indian Currency Design Mechanism
Source: Indian Express
GS II: Indian Economy

What is discussed under the Indian Currency Design Mechanism?

1. Who Makes the Design Decisions for Indian Banknotes and Coins?
2. Types of Notes Issued So Far

Why in News?

On Wednesday (October 26), Aam Aadmi Party (AAP) party chairman Arvind Kejriwal requested that the government print images of Goddess Lakshmi and Lord Ganesh on currencies in order to ‘bring prosperity’ to the nation.

Who Makes the Design Decisions for Indian Banknotes and Coins?

• The Reserve Bank of India (RBI) and the national government make decisions about changes to banknote and coin designs and shapes.
• RBI’s  Central Board and the central government must authorise any design changes.
• The central government has the authority to alter currency designs.
• Internally, the central bank develops a design presented to the Central Board of the RBI.
• The Government of India owns two of India’s currency note printing presses (in Nasik and Dewas).
• The RBI owns two (in Mysore and Salboni) through its wholly-owned subsidiary, Bharatiya Reserve Bank Note Mudran Ltd. (BRBNML).

Role of RBI

• The exclusive right to issue banknotes in India is granted to RBI under Section 22 of the Reserve Bank of India Act, 1934.

  

• The Central Government must approve the design, form, and substance of banknotes after considering the suggestions provided by the RBI’s Central Board, according to Section 25.
• The primary role of currency management is administered by the Department of Currency Management of the RBI, which is presently led by Deputy Governor T Rabi Sankar.
• The Department deals with:
  • Operational and policy issues related to designing banknotes
  • Forecasting demand for notes and coins
  • Ensuring the smooth distribution of banknotes and coins throughout the country
  • Retrieval of unfit notes and uncurrent coins from circulation
  • Ensuring the integrity of banknotes
• If a modification is required in a currency note’s design, the Department creates the alteration, presents it to the RBI, and the latter suggests it to the central government.
• The ultimate permission is given by the government.

Minting of coins

• The central government has the authority to create and manufacture coins in a range of denominations according to the Coinage Act, 2011.
• The government determines the number of coins to be minted based on the indents it receives from the RBI on an annual basis.
• Four mints owned by the Indian government, located in Mumbai, Hyderabad, Kolkata, and Noida, produce coins.

Types of Notes Issued So Far

• Ashoka Pillar Banknotes:
  • The Rs 1 note, printed in 1949, was the country of independent India’s first currency.
  • The new banknotes kept the same layout but swapped out King George’s image for the Ashoka Pillar at Sarnath’s Lion Capital emblem in the watermark window.
• Mahatma Gandhi (MG) Series, 1996:
  • On the front side of each banknote in this series is a portrait of Mahatma Gandhi in place of the Lion Capital of Ashoka Pillar symbol, which was shifted to the left, close to the watermark window.
  • The Mahatma Gandhi watermark and Mahatma Gandhi’s likeness are both present on these banknotes.
• Mahatma Gandhi series, 2005:
  • Notes in the “MG series 2005” were printed in the following denominations: 10, 20, 50, 100, 500, and 1,000 rupees.
  • When compared to the MG series from 1996, they include a few new or extra security features.
  • The Rs. 500 and Rs. 1,000 notes from this series were discontinued as of November 8, 2016, at midnight.
• Mahatma Gandhi (New) Series, 2016: 
  • The “MGNS” annotations showcase the nation’s rich cultural history and scientific achievements.
  • These notes are more wallet-friendly and are anticipated to experience less wear and tear because of their smaller size.
  • The colour palette is vibrant and crisp.

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