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India: Reserve Bank Pilots Coin Vending Machines

Categories : Cash connects people, Cash does not require a technology infrastructure
March 31, 2023
Tags : Access to cash, Cash Infrastructure, coin, India
The smooth circulation of coins is a pain point in the cash cycle. The RBI innovates by deploying vending machines to enhance access to coins.
Guillaume Lepecq

Chair, CashEssentials

This post is also available in: Spanish

The Reserve Bank of India (RBI) is preparing to launch a pilot project using QR code-based Coin 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 cash vending machines, the QCVM eliminates the need for physical tendering of banknotes and their authentication.

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-code 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.’

This post is also available in: Spanish