Coimbatore: Suspected diversion and smuggling of coins to the North Eastern States, Kolkata and Bangladesh for melting and extraction of metals for the manufacture of blades on one hand and stagnation of coins in the denomination of Re. 1 in coin box phones has resulted in acute shortage for coins in the market.
In fact shortage of coins was prevalent across the country that recently the Reserve Bank of India even held coin mela’s in the north for the distribution of coins. Bank authorities pointed out that the coins in the denomination of Re. 1 vanished from circulation for a period ranging from 15 to 45 days because of its extensive use in making calls from coin box phones. Even by conservative estimates, the telecom and bank authorities pointed out that 22 to 35 per cent of the coins i.e., in the denomination of Re. 1 get stagnated in the coin box phones. While the coins of other denominations i.e., Rs. 2 and Rs. 5 were being stagnated by market forces for the purpose of selling them to agents for higher value for the purpose of melting and extraction of metals.
Officials feel that the metals present in the coin should be fetching higher value than the value of the coin, hence the diversion and hoarding of these coins.
Recently, the RBI even called for the return of Rs. 5 coins for replacement with coins (with metals not opted by forces that block and smuggle them) of lower denomination for easing the shortage of coins.
Even banks were instructed to ensure that coins were not issued in bulk to individuals to ensure that these coins were not diverted for melting and extraction of metals therein.
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