KEEP COINS & NOTES SUFFICIENT

Amid growing demand for currency, the RBI today asked banks to explore the possibility of using the services of business correspondents to distribute banknotes and coins. In the Monetary Policy Statement 2013-14, the Reserve Bank of India had stated there was a need to identify alternative distribution avenues to effectively meet the growing demand for banknotes and coins. "Banks may explore the possibility of offering these services through business correspondents and consider engaging the services of cash in transit entities for the purpose of distribution of banknotes and coins, thereby addressing the last-mile connectivity issues," the central bank said in a notification. Currently, the scope of activities of business correspondents includes identification of borrowers, collection and preliminary processing of loan applications, creating awareness about savings and other products and processing and submission of applications to banks. Services of business correspondents could also be used by banks for follow-up for recovery, disbursal of small value credit and collection of small value deposits. Non-governmental organisations, micro-finance institutions, section 25 companies and post offices, among others, could act as business correspondents.