Anyone travelling by bus is affected by the shortage of small change. Bus conductors often ask for change, and if you don't have any, often doesn't return any.
They just ignore giving back a rupee or two, but some don't protest if they get a rupee or two less. Then give a conductor Rs 10, for the minimum bus fare of Rs 7, and he may return you Rs 5 or may ignore giving you back anything unless you ask for change. Small shops may give a toffee you don't need.
The number of coins issued is limited, since it costs the Central Bank (CB) more than the face value to mint coins, and CB encourages consumers to return coins into circulation rather than accumulate at home. In India however, customers insist on correct change and unable to get sufficient coins from the banks, traders have to pay a heavy premium to get the coins.
"For one (Indian) rupee coins worth Rs 100 one has to pay Rs 114, while for two rupee coins worth Rs 100 one has to pay Rs 115. For five rupee coins worth Rs 100 one has to pay Rs 118. These rates keep changing. During festivals, the premium goes as high as Rs 125 for coins worth Rs100," according to a Mumbai trader. Fed up with the coin shortage, the traders in the south Mumbai wholesale markets of Masjid Bunder and Bhendi Bazaar have hit upon an idea to use their own tokens which are honoured within their community, virtually like official currency. Such tokens of Rs.1 and Rs.2 denominations minted by the Mandvi-Koliwad Association (MKA) and put into 'circulation' early last month are proving to be an instant hit in the trading community reeling under official coin shortages and black-marketing of the small change.
The denomination is printed on the obverse and on the reverse the MKA's logo is boldly minted. A customer need not legally accept a token as much as (s)he may not accept a toffee, since the shop has no change. The trading community was left with no option "since over a year, the coin shortage is plaguing the markets. Tokens worth Rs 50,000 have been made in the first batch; more will be made depending on the response," says Dinesh Shah, a grocery store owner and member of the association.
"Right now, only regular traders are using the coins so that the circulation remains within the market," said another trader. Perturbed by reports of illegally-minted small denomination coins being used in certain parts of the city, the Reserve Bank of India (RBI) promised to get to the bottom of the case. "I have gone through the reports. These are newspaper reports indicating its use in some areas. We have to verify it. I have asked the RBI's Mumbai office to get details of it," RBI Governor D. Subbarao told reporters. RBI Deputy Governor V. Chaturvedi said that so far, nearly 12 billion coins have been put into circulation in the markets.
"There is no shortage at any levels of any kind and we have sufficient stocks in our currency chests also," Mr Chaturvedi assured, though he wondered where the coins were going, referring to the complaints of shortages. Since it probably costs RBI more than face value to mint their coins, wouldn't the RBI be saved, if the markets issue their own tokens accepted by the public as coins.
(The writer is a regular traveller on public transport) |
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