Introduction:
The Reserve Bank of India (RBI) is collaborating with banks to test a QR-code-based coin vending machine that deducts the required amount from the customer's account using UPI instead of physical tendering of banknotes. The initiative aims to improve the accessibility of coins.
Key Points:
Pilot Project: The pilot project is planned to be rolled out at 19 locations in 12 cities across India. The machines are expected to be installed at public places such as railway stations, shopping malls, and marketplaces.
Elimination of Banknotes: The vending machines aim to eliminate the need for physical tendering of banknotes and their authentication. This is because fake currency is often fed into conventional machines, and the currency cannot be checked for authenticity at that point.
Accessibility to Coins: The vending machines dispense coins in required quantities and denominations, easing the accessibility to coins. The supply of coins is high, but it is not getting distributed evenly.
Coin Significance: As of December 30, 2022, the total value of circulation of rupee coins stood at ₹28,857 crores, an increase of 7.2% from the year-ago period. Coins in India are issued in denominations of 50 paise, one rupee, two rupees, five rupees, ten rupees, and twenty rupees.
Coin Dispensation: The proposed mechanism for coin dispensation would be a shift from the conventional machines, which rely on banknotes for facilitating coin exchanges.
Digital Push: The initiative aims to supplement digital payments, and the reliance on UPI for dispensing coins is noteworthy. The RBI is also in the middle of a pilot for the Central Bank Digital Currency (CBDC).
Conclusion:
The RBI's initiative to test QR-code-based coin vending machines aims to improve the accessibility of coins. With digital payments increasingly becoming popular, the initiative aims to supplement these modes of transactions. The initiative showcases the flexibility of the RBI in adopting different means to achieve its ultimate objective of operating the currency system of the country.
Related Constitutional Articles of the Indian Constitution:
Article 1(1): India, that is Bharat, shall be a Union of States.
Article 265: Taxes not to be imposed save by authority of law.
Article 266: Consolidated Funds and public accounts of India and of the States.
Article 267: Contingency Fund.
Article 268: Duties levied by the Union but collected and appropriated by the States.
Article 269: Taxes levied and collected by the Union but assigned to the States.
