Lining up at the ATM? Here's how your cash actually gets there

Everyone likes money, especially with the Modi government's demonetisation policy in full swing. But how do the 100-rupee note, which has reasserted its real value, and the new 500- and 2,000-rupee notes reach your nearest automated teller machine (ATM)? 

From the printing press to the ATM, its a journey that starts with calculations at the Reserve Bank of India and culminates in the execution of a very complicated logistics plan. 

From the printing press to the ATM:

1) Finding our the country's cash needs: The RBI first calculates India's annual cash requirement. According to an Indian Express report, the calculation takes into account the quantity of notes in circulation, those which might have been destroyed, and how many would be needed for replacement. Other factors, the report added, such as projected GDP growth and inflation are also accounted for. The process starts early in the calendar year, before the new fiscal year begins, and RBI informs the Ministry of Finance about the amount of currency that needs to be printed.  

 

2) Telling the printing presses: India has four printing presses: One in Nashik (Maharashtra), one in Dewas (Madhya Pradesh), another in Mysuru (Karnataka( and the last in Salboni (West Bengal). These presses  print out the notes after an order is placed with them and instructions are received regarding denominations and quantity of notes to be printed. The high-security paper used to print the notes comes from the currency paper mills in Mysuru and Hoshangabad. 

3) Distributing the notes across the country: Once the notes have been printed, they need to be distributed across 19 regional centres of the RBI. Along with these centres, there are 4,000 currency chests which serve areas not covered under these centres and they too need to receive the freshly printed notes. However, as explained by the IE report, even after these notes have reached their destinations, they do not hold any value till they are backed by cash or securities of equal value.     

4) Banks receive the notes: For the notes to reach your pockets, they first need to reach the banks. As a Times of India report explained, banks place an indent with the RBI. Based on these indents, the central bank then dispatches the currency to 2,800 bank currency chests across India. But they still need to get to the numerous bank branches, and for that the banks appoint cash-in-transit (CIT) companies. The CIT companies take the cash from the banks' respective currency chests and transport them to their respective branches. 

5) ATMs finally get filled up: Off-site ATMs are generally filled up with cash by these CIT companies, according to the report. ATMs which are attached to their respective bank branches are filled up with cash from the concerned branch's vault. India has 2,20,000 ATMs and of these around 1,50,000 are filled up by the CIT companies. 

6) But what about the cash crunch? The central government has reportedly requested the service of Indian Air Force (IAF) to bolster its efforts to transport the newly-minted notes to banks. According to the Times of India, IAF aircraft like Mi-17 and C-17 Globemaster, large military transport planes are being used to transport notes Mysore and Nagpur mints as well the RBI regional centres.