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What's in your currency chest?

Recently, Counting on Currency shared the vision of the Reserve Bank of India for banknote management. Reader skepticism about its viability prompted a closer look.

August 4, 2014 by Brendan Burge

In a recent blog, "Banknote Custodial Inventory Best Practices," Counting on Currency offered a current article that articulated the vision of the Reserve Bank of India for banknote management.

This article outlined what could possibly be represented as centralized banknote best practices for managing inventory, quality and availability. Many readers responded with varying levels of skepticism as to the effectiveness of word put into action, and as I have not visited India myself and can offer no first-hand experience I went in search of someone with boots-on-the-ground experience.

From those willing to discuss their experiences, a basic understanding of the realities becomes clear. The notes that follow are truly a look inside a currency chest.

Security — Out of respect for the realities of public information that should be treated as proprietary, suffice to say any European, North American or Asian worker in the banknote management field would voice immediate concerns with common practices.

Shipment and container tracking —Non-existent. There seems to be no way to know where individual parcels of money are when in transit, and no readily available indication of pickup or delivery confirmations.

Currency chest receiving — A man with a clipboard receives a manifest from the CIT driver and visually confirms container counts.

Currency chest deposit processing —Deposits are split into two streams: those with a declaration of value and those without. All deposits are processed manually with counters and paper — no computers in evidence.

Currency chest banknote quality sorting —All sorting seems to be done at the single denomination level with lesser regard for standardized quality criteria.

Currency chest shipping — Here's where the fun begins!

apparently good segregation of quality categories (ATM-fit, fit, mutilated);
chronic shortage of in-demand ATM denominations;
no foreknowledge of incoming supply and historical outgoing demand; and
all RBI orders are reactive and traditionally last minute.

Computerization —As mentioned above, there were no computers visible in the deposit processing areas. More curiously, there were no computers in evidence anywhere!

Although the original article painted a picture of a utopian system, the reality when we get a look inside a currency chest reveals almost an opposite interpretation. No matter what the observations, what exists seems to work.

Indeed, there would appear to be many gaps in policy vs. practice and therein lies enormous opportunity for improvement. There simply has to be a real need at the “boots-on-the-ground” level beyond what can be satisfied with warm bodies, pencils and more paper.

photo courtesy liz west | flickr

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