The more civilized, refined, analytical and scientific, that man became, the more refined, sophisticated, systematic and symbolic, became the form of currency. All that a primitive man needed was a hunting knife to satisfy his varied wants. Now that tool has progressed and evolved into the modern-day credit card, with which a man can buy anything he needs. The process of evolution continues into the future with currency changing as the times change. The present world economic scenario strongly requires the development of alternate modes of currency as a medium of exchange which can match the fast paced, computerized economy. The future is thus in the use of handheld, electronic 'Cash Pads' which will replace paper currency for many day-to-day transactions. Carefully developed electronic pads can control the happenings of fake currency, any many other type of fraud. It will also have the properties of better durability and dependability than paper cash. It can become true legal tender with almost no chances of black income. Practically every type of financial corruption can be avoided. Through this system, a monitoring body can have full control on the flow of currency (i.e., every deal can be accounted for). Electronic currency will certainly prove to be a scientific & technically competent mode of exchange. THE ELECTRONIC CURRENCY PAD: Electronic currency system can be operated through electronic currency pad to be issued to every citizen of the country. Electronic currency pad will be a small handy electronic instrument. This will have besides "on button", buttons from A to Z, Buttons from 0 to 9, payment button, bank payment button, receipt button, bank receipt button, search button and balance button with simple calculation buttons. These pads will have password operating system. Each pad will be assigned a unique code number for identification. These pads will also have screen, speaker, input-output sockets and a cord. ELECTRONIC CURRENCY PAD Electronic Currency will function on the principle that every deal/ transaction affects two sides, i.e., one is receipt other is payment (one is receiver another is 'giver', payment maker). This means that when one person is receiving from another, it implies that that another related person is paying. This is how the transaction will take place. Electronic Currency Pads will be fed, through Internet by banks, into their memory transaction codes issued exclusively for that particular pad along with all transaction codes issued to any electronic currency pad with in that country. These transaction codes will be computer generated which will come to be known only at the time of transaction. In this system, every financial transaction will be accounted and reconciled leaving no scope for unaccounted money i.e. black money. HOW ELECTRONICS CURRENCY PAD WILL FUNCTION? A. CASH TRANSACTIONS: Assume X pays Y for some purchases. This transaction will be performed through X's electronic currency pad and Y's electronic currency pad. Here X is payer while Y is receiver. X, on his electronic currency pad, will first switch on by pressing ON Button then will plug cord's one end into his output socket. Y will plug other end of the same cord into his electronic currency pad's input socket after switching on his pad. Now X will press payment button in his electronic currency pad. On pressing the payment button, immediately transaction code for the proposed transaction will appear in X's pad's screen. X will type the desired amount by typing related numbers under country currency mode and then press payment button. Y, on the other hand, will press receipt button. Now as X presses payment button, Y's electronic currency pad will depict in its screen the amount receivable along with X's transaction code. Now Y's electronic currency pad will verify for the validity of X's transaction code with the Y's electronic currency pad's memory. The memory of electronic currency pad contains, as already explained, transaction codes of the whole country issued to any electronic currency pad anywhere with in the country up to a particular period. These transaction codes will be fed by bank. Now if X's transaction code matches with the transaction codes in Y's electronic currency pad's memory, both X's and Y's electronic currency pad will be updated effecting the transaction. Both X's and Y's electronic currency pads will now be showing updated balance on pressing balance button. On utilization of the transaction codes, fresh series of transaction codes will be fed into the memory of the electronic currency pad through computer by bank. System should be developed in such a way that transaction code series is periodically updated by the bank. That means electronic currency pad's memory should be periodically updated with transaction codes for smooth functioning. At the time of updating, bank will also update the electronic currency pad's memory with all the transaction codes issued to any electronic currency pad any where with in the country. B. BANK TRANSACTIONS: Another present form of payment is payment through bank that means through cheque. In electronic currency pad system, payment through cheque will be like this- X has to pay to Y through cheque. X will press 'bank payment' button on to his electronic currency pad. Immediately, on pressing bank payment button, bank transaction code will appear in X's electronic currency pad's screen. Now assume Y resides in distant place. In this system, X will intimate Y, his bank transaction code together with the payable amount through telephone, fax, Email etc. Y will press Bank Receipt Button on to his electronic currency pad. Y, on knowing the X's bank transaction code, will feed that transaction code into his electronic currency pad along with the receivable amount as conveyed by X. Now system should be designed in such a way that this Bank transaction will be treated as provisional unless updated by the bank. That means updating of Bank transactions, in this system will be effected and balance will be updated only by bank. In this case X will approach his bank intimating about provisional bank transaction, similarly, Y will also approach his bank with his electronic currency pad stating particulars of receipted bank transaction. Now both X's and Y's bank will clear this provisional bank transaction through normal bank clearing procedure and accordingly update, both X's and Y's electronic currency pads and account statement with bank, for balance. This bank clearing will be through Internet for speedy clearance. In this way, Banks can function smoother, efficient and faster. No cheque is to be written, all costs and time relating to handling cheques is saved resulting in quicker business deals with easy realizations. Alternatively, Electronic Currency Pad can be designed to be operative without cord for electronic currency cash transaction. This improved device does not require input-output sockets also.

E-currency System is a complete computerized monetary System, proposing to replace the present paper currency system. Initially it is planned to launch e- currency system as an alternative to credit/ debit card system. If accepted, e- currency system can automatically become legal tender ultimately replacing the physical paper currency system.


  • Economic Impact when e-currency system is partially implemented i.e., as a fool-proof alternative to credit card/ debit card system.
  1. Effective control on cyber crimes relating to money transfer systems.
  2. Increase in public confidence in the monetary system.
  3. No fear of theft/ dacoit.
  4. Facility of instant money transfer without the risk of online threats.
  5. ECM is not internet connected. No jammers etc. damaging somebody's transaction through blue tooth technology etc.
  6. Fool proof and secured system. No fear of making duplicate, copying unique code number etc. There will be three levels of controls viz., unique code number, password operating system preferably with biometric sensors and transaction codes.
  7. Not hazardous to health as compared to mobiles.
  8. There will be a Bank’s computer generated reconciliation statement tracking every stage of any transaction. Bank will have a complete parallel records of every transactions.       
  9. No need to buy different swapping machines. Instead if any person does not have electronic currency machines and he wants to transact with the person with ECM, only thing he will have to do is to register himself with Bank’s website, who in turn will allot him “Virtual Electronic Currency Machine” on screen. This virtual machine through “Dongle” will make that person transact as if he has the real machine. The amount will directly gets credited through Bank’s website in his account with the Bank.
  10. Even illiterate person will be able to do transactions through ECM as there will be a speaker speaking every stage of transaction for the ECM Holder.
  11. Besides, ECP has all the benefits of credit cards.
  12. Bank will issue the ECP to its customer after charging its cost to the banker. As it is, the banker charge its customer for issuing credit card/cheque book etc. The amount for issuance will be one time cost say Rs. 2500 to Rs. 3000 per ECM depending on the actual cost to the bank.
  13. Banker's as per their policy will charge certain transaction processing fees as its revenue. Certainly operating cost will be the most competitive.
  14. Through ECP banker can provide both debit/credit facility. Only thing bank will have to do is just transfer the desired amount to the customer's ECP as debit when he has the amount with him in his bank account. When customer wants to take credit from bank, bank will transfer the desired amount as OD/credit, after checking his application.
  15. The range of operating distance, Yes, any account holder having ECP can transact through Cash transaction/ Bank transaction option anywhere in India and abroad.
  16. Size of the ECP: Approximately size of a standard mobile phone.
  17. ECP can easily replace cheque book.
  18. Online payments will become far easier and secure.
  19. Can some one play a fraud with this in case it is lost or stolen: The ECP will be on password operating system , the password will be biometric print of a finger. Hence any body, if,  some how manages to possess somebody's ECP will not be able to operate it because his finger print impression will not match with the finger print stored in the ECP. Still if somehow ,some one play a fraud and misuse the ECP, then , there is a master control reconciliation statement with bank informing about the transactions done after the ECP is lost. This reconciliation statement will inform the bank that with whom and by how much amount the lost ECP has had transactions. The reconciliation statement will also inform the whereabouts of the person with whom that lost ECP has transacted. On enquiring that person, the person who has committed the crime can be caught.

Economic Impact when E-currency system is exclusively implemented as a replacement to paper currency system.
  1. In addition to generating a continuous flow of Income Cycle, many other social and economic aspects like illegal ‘hawala’ money for the terrorists, drug trafficking, counterfeit currency, payment of dowry and related problems, all types of social and economic crimes such as unemployment, terrorism, poverty, inflation, white collar crimes etc due to spurious money can be effectively controlled to a great extent through  e-currency system:-
  2. Monetary inflation is controlled, in fact, intrinsic value of money will be at par.
  3. All types of socio-economic crimes are controlled
  4. Poverty is alleviated
  5. Unemployment problem is solved
  6. Terrorism is controlled
  7. Income Cycle with infinite multiplicity is created
  8. Transaction is possible to any decimals of currency
  9. Printing and Minting costs of paper currency is saved
  10. Eco-friendly as vast jungle areas will be saved. When paper currency printing is stopped, there will be a substantial saving of high quality wood which was earlier cut from jungle trees for making paper required for paper currency.
  11. Real wealth will be create
  12. Standard of living of people will be increased.
  13. Per capita income will be increased
  14. National income will be substantially increased
  15. As all the money in circulation will be always with bank. Banks now will not have to go to public begging for deposits.
  16. Transaction processing will be very fast.
  17. Effective control on financial frauds.
  18. E-currency will be safe from natural disasters like sunami etc. because there is no physical currency. Due to the records in many servers, the restoration of the record is very easy.
  19. Bank will not have to keep big safe for keeping paper currency. No need for security vans for transferring funds from one place to another place. No need for counting machines.
  20. No fear of bank decoity.
  21. People will not need to fear of getting robbed. Counting money at the time of depositing and withdrawing the money into bank.
  22. Banks will play a far major role in the economic development of their nation.

In e-currency system there is a creation of income cycle having the capacity to rotate itself to infinity as against limited multiplicity in case of paper currency system. Condition for infinite rotation in e-currency is its exclusive implementation in the economy. This is possible as all the money in e-currency system is always deposited with the bank simultaneously allowing the liquidity of the money to their actual holder in the form of electronic blips as good as cash in paper currency system.  That means both banker as well as the actual owner of the money have full freedom as regards to its use. Citizen will use the money for his day to day transactions and bank will use the same money at the same time for debt financing. In e-currency system bank is not required to keep any money reserves i.e., CRR is zero. Applying the money multiplier formula (100/CRR) we get 100/0 i.e., infinity further details can be seen by visiting



  • ‘Electronic Currency Pad’ is a handheld electronic diary type instrument through which the monetary transaction between two persons will be done. ECP will have on button, a screen, a speaker, alphabet buttons, number buttons, cash payment button, cash receipt button, bank payment button, bank receipt button, balance button, simple calculation buttons and view transaction button.
  • In e-currency system, electronic currency pad will be issued to every citizen of the country. These ECP’s will have a unique code number issued by the controlling authority. These ECP will have password operating system for example, biometric sensor. Further, their will be transaction codes unique for every transaction done.
  • Two persons having their respective ECP desire to do some monetary transaction will bring their ECP’s within the permissible operating range. They will switch on their ECP, their unique code numbers will be exchanged through infrared sensors. ECP’s memory will verify the validity of the unique code. After verification the transaction process will be initiated. Now the receiver of the money will press his cash receipt button simultaneously payer will press his cash payment button. In payer’s ECP, a cash transaction code will be reflected in its screen. Now payer will feed the payable amount and will press the OK button. On pressing OK button, the payable amount along with the cash transaction code will be transmitted to the receiver’s ECP. After verification the transaction will be done updating both ECP’s balance position after the transaction. The whole process will be done in a few seconds time.
  • Now when in a situation where the persons wanting to transact are at geographically distant places. Because these ECPs are not internet connected to avoid the danger of virus attack, the geographically distant persons will transact in e currency system through Bank Payment button. The payer will press bank payment button, immediately on pressing bank payment button, bank transaction code will appear in the payer’s ECP’s screen. Payer will feed the payable amount. He will ask the receiver to inform him his ECP’s ID code for bank transaction. Payer will feed that code into his ECP and press OK button. ECP will immediately deduct the payable amount from his ECP’s balance, but actually this bank transaction will be finally cleared as OK by the Bank. Now payer will communicate his Bank transaction ID code, bank transaction code and payable amount to the receiver through fax/ telephone/e mail to the receiver who will feed this information on to his ECP after pressing Bank Receipt Button. After pressing OK button, his ECP will not add the receivable amount to his balance amount but will show as a provisional transaction pending Bank clearance. Now both payer and receiver will approach their Banker with their ECPs. The bankers will through internet clear the bank transaction finally updating both receiver and payer’s balance.