"Reserve Bank of India (RBI) plays an important role for Issue and Management of Currency and Distribution of Coins in India". What is Currency Management ? Has the importance of RBI for managing currency has diminished

The currency of our country consists of One-rupee notes and coins (including lower denominations thereof) as well as Bank notes issued by RBI. Issuance of bank notes (currency) is one of the original central banking functions for which the RBI was established. In terms of section 22, of the RBI Act, 1934, RBI has the sole right to issue bank notes in India. Such bank notes are issued by a department of RBI known as Issue Department, which is a separate and wholly distinct department from the Banking Department which is responsible for banking business of the RBI. However, the design, form and material of bank notes are to be approved by the Central Government based on the recommendations of Central Board of the RBI. Every bank note shall be a legal tender at any place in India. On recommendation of the Central Board, the Central Government may declare any series of bank notes of any denomination to be not a legal tender. Within RBI, the Department of Currency Management ('DCM') has the responsibility of administering the functions of currency management. Currency management basically relates to the issue of notes and coins and retrieval of unfit notes from circulation. To improve the currency distribution system by leveraging technology, the RBI adopted a hub-and-spoke model for the distribution of banknotes across the country. Fresh note remittances are sent to larger currency chests, which meet the currency needs of a designated area (such as a district). These chests are identified as hub chests and, in turn, supply notes to smaller currency chests in their vicinity which act like spokes in the distribution model. Fresh notes are distributed to every issue office of the RBI as per an allocation plan. The Digital Rupee, also known as e₹, is India's official Central Bank Digital Currency (CBDC), introduced by the Reserve Bank of India (RBI). It represents a digital version of physical currency, maintaining the same face value and legal status as the paper notes and coins in circulation today. RBI's strategy is promotion of diverse digital payment instruments. It oversees the issuance and operation of debit and credit cards, mobile wallets, and UPI, among others. These instruments offer convenience, accessibility and transparency, reducing reliance on cash and expanding financial inclusion. While UPI and digital currencies, like the digital rupee have impacted the financial landscape, they have not necessarily reduced the RBI's role. Instead, the RBI is actively involved in regulating and overseeing both, demonstrating its continued importance in the evolving financial ecosystem. UPI has expanded financial inclusion and boosted the digital economy, while the Digital Rupee, as a Central Bank Digital Currency, provides a secure and efficient digital form of the national currency, both within the RBI's regulatory framework. With the introduction of UPI, many routine transactions—such as paying shopkeepers, utility bills, or transport fares—are now done digitally. For example, a vegetable vendor accepting UPI payments reduces daily cash withdrawals from banks, lowering the demand for physical currency. As a result, RBI now needs to print and circulate fewer banknotes than earlier. However, RBI remains relevant by regulating digital payment systems and launching the e-Rupee, showing that its role has shifted from only managing physical cash to overseeing both physical and digital forms of currency.