Shortchanged: Pay to buy coins

An acute shortage of coins, coupled with a refusal to accept soiled notes, has left Mumbai’s citizens literally shortchanged. A new breed of `businessmen’ dealing in legal tender has emerged, which makes money out of this scarcity, and the Reserve Bank of India (RBI) does not seem to have any means of controlling it.

What it has done is set up 12 banks for the disbursal of coins. “In the suburbs, these banks will liase with local shopkeepers and hoteliers, and will filter out those taking coins mainly for making a business out of it,” says an RBI spokesperson.

High hopes, if people’s experiences are any indication. “Every morning, this Marwari meets me, asking me if I need coins,” recounts Saiprakash Nayak, treasurer of the Federation of Hotel and Restaurant Associations, Maharashtra, and owner of an Udipi restaurant in Matunga, “and I have no option but to buy them from him”.

Despite the RBI’s exhortations to banks to accept soiled notes, there are many nationalised and scheduled banks in Mumbai that do not comply. “We have given instructions that soiled notes be accepted and sent to us so fresh notes can be issued. But the banks fail to do so. Maybe they have personnel problems in sorting out these notes,” observed an RBI official.

As a result, soiled notes are stapled along with a few fresh notes and sent back into circulation. “These banks don’t give the customer in writing that they do not accept soiled notes, but customers tell us they do. If we have proof, we can take action against them,” says an RBI official.

But of greater cause for worry is the mystery behind the disappearing coins, specially to people like Nayak, who run small enterprises, and are always in need of small change. “After the list of new banks disbursing coins was advertised, I went to my local bank, but was told that it had received no intimation from the RBI,” he says.

So he was forced to return to the local coin dealer. “The RBI wants us to come to its Fort branch every morning to collect coins. It is a risk taking those bagful of coins, for which a taxi will have to be hired. So in effect I am spending much more on the money I take,” he points out. He feels that this shortage is purely manmade, where agencies which receive coins in bulk are not putting it back into circulation. “Why should the Railways put up signs asking for exact change?” he questions. He also suspects BEST buses, where many conductors have booted out commuters for failing to tender exact change, and fears they may be patronising roadside stall owners who sells coins.

As more and more notes in the smaller denominations of Re 1, 2 and 5 get phased out, the demand for coins is on the rise. “Earlier, the Rs 5 coin would hardly be picked up, but today it is in great demand,” says the RBI spokesperson. The mint manufacturing the coins also faces a labour shortage in May, said RBI officials. Sometimes, the RBI also fails to get the required police staff to escort the lakhs of rupees from the mint.

MONEY TALKS