RBI Pilots Coin Vending Machines to Improve Distribution

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.

The RBI recently announced the rollout of the project as part of its latest Statement on Developmental and Regulatory Policies. 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, they can be obtained from coin vending machines but, again, rely on banknotes being fed into these, which 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 its 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 the 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.

The RBI has said that it will issue guidelines to banks to promote better distribution of coins using QCVMs, based on the learnings from the pilot tests.

Commenting on the initiative, Rajsri Rengan, Head of Banking and Payments, India and Philippines, at the fintech company FIS said: ‘the new QR-code based pilot will offer ease and ready access to coins for customers via the UPI facility. With the initial launch across 12 cities in India, this move by the RBI is a strategic decision which will benefit the Indian payments landscape.’