News in Brief

RBI Pilots Coin Vending Machines

The Reserve Bank of India (RBI) is preparing to launch a new pilot project using QR code-based Coin Vending Machines (QCVM) in order to improve coin distribution in the country.

Working in collaboration with a few leading banks, the pilot project will initially be rolled out at 19 locations in 12 cities across the country.

At present, people need to visit their bank branch to withdraw coins. Coins are also distributed from the RBI’s regional offices. In both cases, coins will only be issued against banknotes tendered. Alternatively, coins can be obtained from coin vending machines but, again, rely on banknotes being fed into them, and have often fallen victim to counterfeit notes being used.

The RBI has long struggled with excess coin stocks, and needed to find an alternative to cater to demand and reduce the very high supply of coins held in their storage facilities. Hence the development of this new initiative, with the aim to expand it should it be successful.

The QCVM is a cashless coin dispensation machine which will dispense coins against debit to the customer’s bank account using Unified Payments Interface (UPI). Unlike traditional cash-based coin 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.

French Banks Head Towards an ATM Utility Model

Three leading French banks have announced a plan to share ATM services, similar to what has happened in the Netherlands and Belgium. They operate about 15,000 of France’s 48,000 ATMs.

BNP Paribas, Credit Mutuel Alliance Federale (CMAF) and Societe Generale have announced the launch of a jointly owned company, Cash Services, which will modernise and mutualise the banks’ ATMs in France to improve cost efficiency and increase revenues through additional services.

Cash Services will be based on the banks’ ATMs and be fully operational by the end of 2025, with the rollout starting in the fourth quarter of 2023, managed by a company jointly owned by the banks. The three groups cover four banking networks as they also include CIC, a part of CMAF. A McKinsey study estimates that mutualising ATMs could reduce costs by 20-35%.

French banks have been relatively slow to reduce the number of bank branches. Between 2015 and 2021 the reduction was 5%, compared with 24% in the eurozone.

Travelex Expands in Middle East

The foreign exchange company Travelex has introduced its wholesale banknotes (WBN) operation in the Middle East, with the objective of becoming the leading banknote supplier in the region.

It will provide more than 80 currencies to a range of retail banking and other customers in the region, undertaking shipments to and from Malaysia, Hong Kong, the UK and the Gulf Region.

According to Batu Dolay, Commercial Director of Travelex Middle East and Turkey, ‘we pride ourselves on our unrivalled ability to source and distribute banknotes across the globe by leveraging Travelex’s global vault network, and in 2023 we look forward to building upon and growing our client base to establish long-term partnerships across Europe, Asia, the wider MENA region and beyond.’

In addition to its WBN operations, Travelex operates over 1,000 branded ATMs and foreign exchange bureaux in and outside airport locations across 60 countries.

India To Go Local for Thread Production

Security Paper Mill, a unit of Security Printing and Minting Corporation of India Ltd (SPMCIL) located in Narmadapuram (formerly known as Hoshangabad), has invited Expressions of Interest from companies for the establishment of a new security thread manufacturing plant for both Indian and export banknotes.

The range of technologies required include threads with magnetic and non-magnetic properties, colour shift and microtext. Indicative options for setting up the manufacturing plant include technology transfer, joint venture, contract manufacturing, BOT (Build Operate Transfer) or BOOT (Build Own Operate Transfer) models.

Indian currency requires around 24,000 tonnes of paper per year, and the annual production requirement of threads is likely to be in the order of 2.4 million km.

All Indian banknotes currently feature security threads – narrow metallised versions for the three lowest denominations, and colour shift windowed threads for the higher RS 100, 200, 500 and 2,000 notes, all of which is imported. The government is committed to indigenisation of all banknote production, and other recent moves towards this include the opening of a new high security ink facility, VARNIKA, last year and the further expansion of paper production with an additional paper mill.

Safeguarding Cash: ICA Recommendations

The International Currency Association (ICA), representing the global currency sector, has published a Cash Policy White Paper, with which it aims to inform the debate on cash and engage even further in dialogue with stakeholders and policymakers on its recommendations.

According to the ICA, cash has been the cornerstone of trade, the economy and society for thousands of years, but today the ability of people to access and to use cash is under threat. Global electronic payment companies, which make huge profits by selling customer data or by charging per transaction, are lobbying to restrict the supply and the use of cash and to persuade people to change their payment habits.

Against this background, policy makers should recognise that the benefits of cash to society may be lost without practical steps to protect the supply and acceptance of cash in society and promote its further development.

The white paper contains eight key recommendations:

Ensure that retailers accept cash
Ensure that everyone can access cash easily
Provide easy to use cash deposit touchpoints
Give consumers transparency on costs of all forms of payment
Promote a sustainable cash cycle
Embrace diversity in the development of payments landscapes
Remove restrictions on high denomination banknotes and caps on the use of cash
Educate the next generation, redesign cash and communicate about its value.

A more detailed description of the recommendations can be found in Currency News™ sister publication Cash & Payment News™.

In the meantime, the white paper can be downloaded at currencyassociation.org.