Panel moots proactive plan for currency management

The Reserve Bank of India (RBI) and banks need to initiate a pro-active mechanism for effective currency management, says the Tarapore Committee's report on currency management.

The committee has recommended that the currency chest agreements should be revised so as to include in them a provision for a monetary penalty for non-compliance of the directions and guidelines.

It felt that the RBI will have to take appropriate action to remove the inconveniences experienced by the public in using banks for obtaining their requirement of notes and coins including exchange of soiled and mutilated notes and coins.

The committee has asked the Reserve Bank of India to take steps towards early introduction of Rs 10 coins and end the parallel supply of bank notes and coins of the same denomination.

The Tarapore Committee has lauded the RBI and Government of India's concerted efforts to ease the chronic shortages of bank notes and coins thus reducing the hardships faced by the common person.

However, has asked the Reserve Bank of India and banks to introduce an effective policy for currency management.

The central bank has placed the report on currency management on the website.

The RBI has forwarded the recommendations of the Tarapore Committee to the concerned banks for follow-up action through their internal ad-hoc committees on procedures and performance audit on public services.

The Reserve Bank of India has urged the ad-hoc committees to initiate necessary steps for simplification of procedures and practice in these areas especially for transactions with the individual members of public.