India: Reserve Bank Pilots Coin Vending Machines
Chair, CashEssentials
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The Reserve BankSee Central bank. More of India (RBI) is preparing to launch a pilot project using QR code-based CoinA coin is a small, flat, round piece of metal alloy (or combination of metals) used primarily as legal tender. Issued by government, they are standardised in weight and composition and are produced at ‘mints’. More Vending Machines (QCVM) to improve coin distribution in the country.
Access to Coins where they are Needed
The RBI announced the project’s rollout as part of its latest Statement on Developmental and Regulatory Policies earlier this month. Working in collaboration with a few leading banks, the pilot project will be rolled out at 19 locations in 12 cities nationwide. These vending machines are intended to be installed in public places to enhance ease and accessibility,
This will enhance the ease of accessibility to coins. Based on the learnings from the pilot, guidelines will be issued to banks to promote the distribution of coins using these machines. — Shaktikanta Das, RBI Governor.
At present, people need to visit their bank branches to withdraw coins. Coins are also distributed from the RBI’s regional offices. In both cases, coins are reissued banknotes tendered. Alternatively, coins can be obtained from coin vending machines but rely on banknotes being fed into them and authenticated.
The RBI has long struggled with excess coin stocks and needed an alternative to cater to the demand and reduce the high supply of coins held in their storage facilities. Hence the development of this new initiative to expand it should it be successful.
Dispensing Coins from Bank Accounts
The QCVM is a coin dispensation machine which will dispense coins against debit to the customer’s bank account using Unified Payments Interface (UPI). Unlike traditional cash-based cashMoney in physical form such as banknotes and coins. More vending machines, the QCVM eliminates the need for physical tendering of banknotes and their authenticationThe process of proving that a banknote or security document is genuine. More.
Users will also have the option to withdraw coins in the required quantity and denominations from the machines. These are planned to be installed at public places such as railway stations, shopping malls, and marketplaces to enhance ease and accessibility.
The RBI has said it will issue guidelines to banks to promote better distribution of coins using QCVMs, based on the learnings from the pilot tests.
Commenting on the initiative, Rajsri Rengan, Head of Banking and Payments, India and Philippines, at the fintech company FIS said: ‘the new QR-codeA QR-code (abbreviated from Quick Response code) is a type of matrix barcode (or two-dimensional barcode) first designed in 1994 for the automotive industry in Japan. A barcode is a machine-readable optical label that contains information about the item to which it is attached. In practice, QR-codes often contain data for a locator, identifier, or tracker that points to a website or application. A QR-code uses four standardized encoding modes to store data efficiently; extensions may also be use... More based pilot will offer ease and ready access to coins for customers via UPI facility. With the initial launch across 12 cities in India, this move by the RBI is a strategic decision which will benefit the Indian payments landscape.’
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