RBI says coin shortage ‘artificial’

The RBI’s disclosure comes after the private bus operators had alleged that they had to introduce plastic coins and special coupons to be used as substitutes because there was shortage of coins in the state.

Kolkata | Updated: February 5, 2014 6:10:34 pm
The RBI says it had requested the CBI to investigate into the matter but so far remains in dark about the outcome of any investigation that the agency may have carried out. The RBI says it had requested the CBI to investigate into the matter but so far remains in dark about the outcome of any investigation that the agency may have carried out.

Making its stand clear on the growing tussle between bus operators and an NGO over the use of coupons and plastic coins as means of currency, the Reserve Bank of India (RBI) has said that it had issued sufficient number of coins in the recent years for West Bengal, Sikkim and Andaman & Nicobar Island.

As per an affidavit filed by RBI, it had issued 821.68 million coins in the year 2012-13, 722.62 million coins in 2010-2011 and 803.53 million coins in 2011-2012 in the market through its 13 coin-vending machines in Kolkata, besides from the Currency Chest and Small Coin Depots of several commercial banks.

The RBI’s disclosure comes after the private bus operators had alleged through an affidavit that they had to introduce plastic coins and special coupons to be used as substitutes because there was shortage of coins in the state. NGO India’s Smile had filed a PIL in response, saying the bus operators had forced the passengers into using the alternate means of currency. The PIL had also alleged that several rackets active in the state extract the metal out of the coins and sell the produce in the market.

The RBI’s affidavit supports the NGO’s claim, and even says that the shortage of coins, as claimed by the bus operators, is “artificial”. The affidavit also says that the coins have been “misused”, and that the bank “has no power to prevent such misuse”.
The affidavit refers to this “misuse” through a letter — from the General Manager of the RBI, Kolkata to the Joint Director of Subsidiary Intelligence Bureau of the Central Government, Kolkata sent on August 22, 2006 — which said that “the demand of Re 1 and Rs 2 coins was suddenly on rise from the RBI counter in the city while that of coins from the Currency Chest was not.

“Be that as it may, there are some unconfirmed reports that coins, especially those of Re 1, are being melted to extract metal for trading and other purposes. This is against the law. Incidentally, the metal prices, too, have risen sharply in the last few months,” the letter had pointed out. The RBI had requested the central agency to investigate into it.

This letter, the affidavit says, was followed by another letter — written by RBI’s Deputy General Manager to the Superintendent of Police, CBI, Kolkata on February 7, 2007 — apprising the SP of “coins also being used as automobile spare parts (washers, rivets, bolts) after being melted”.

The RBI says it had requested the CBI to investigate into the matter but so far remains in dark about the outcome of any investigation that the agency may have carried out.

In the affidavit, the bank also mentions three arrest made by the Girish Park police station on June 22, 2007 for alleged misuse of coins and the seizure of 183 kilogram of Re 1 and Rs 2 coins (in solid state) from a brass workshop on Simla Street in Kolkata.

Kanchan Chakraborty

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