New Delhi: In a bid to remove soiled and counterfeit notes from circulating in the country, Reserve Bank has installed Currency Verification and Processing Systems (CVPS) and is planning to distribute coins in exchange of currency notes through post offices and railway counters.

"We have installed CVPS in many of our centres, which can sort 50,000-60,000 pieces of soiled and counterfeit pieces (notes) per hour. With this, we will be able to rapidly remove bad notes from the system," RBI deputy governor Vepa Kamesan said on the sidelines of micro-finance conference on September 4.

He said the RBI was also planning to use post offices and railway counters to distribute coins in exchange of soiled and bigger denomination notes.

"We have started the system of distributing coins through post offices in Maharashtra. It will be extended to other parts of the country also," Kamesan said.

RBI has been distributing coins from its own counters and also from special branches of commercial banks till now. But the effort to meet the demand appears to have hit the roadblocks in the absence of adequate distribution channels.

Kamesan said rural banks and co-operatives would also be used for distributing coins.

RBI is now flushed with coins, which are not only minted in the country but also imported. Yet, there is artificial shortage with private agencies demanding exorbitant commissions for exchanging coins for notes.

RBI launched a one-week "special drive" in the city from August 26, to distribute coins to traders, merchants and others through branches of SBI, State Bank of Patiala, PNB, Punjab & Sind Bank and Bank of India.

PTI