RBI push to coin use, mass financial literacy

Counters at regional HQs to exchange coins with currency notes

By Dev Raj in Patna
  • Published 5.06.18
RBI regional director NP Topno (left) at the RBI office in Patna on Monday. Picture by Nagendra Kumar Singh

Patna: The Reserve Bank of India (RBI), in view of the coin glut in Bihar, said on Monday that the central government was encouraging use of coins, and it was receiving two to four truckloads of coins daily in Patna to be distributed across the state through banks.

"Two to four truckloads of coins are coming to us everyday, which we distribute through banks. The central government wants to encourage the use of coins," said RBI regional director N.P. Topno.

The RBI regional director was interacting with mediapersons at the inaugural of Financial Literacy Week, which also saw the launch of five vehicles that will travel all over the state to spread financial literacy among the masses. RBI general manager Manoj Ranjan and other officials were also present on the occasion.

Topno said the use of coins of smaller denomination is being encouraged because issuing currency notes of smaller denomination costs much more to produce than the value printed on them.

Also, the life of notes of smaller denomination is very less, ranging from one to three years. On the other hand, there are no such problems with coins.

However, people in Bihar, especially businessmen, have been left stranded with coins of various denominations worth several thousands of rupees, in some cases running into a few lakhs of rupees.

The situation has arisen as traders and merchants accept coins from their customers but when they go to deposit them in banks, the officials refuse to take them on the plea that counting them is cumbersome and takes much time. At times, customers too refuse to take coins while buying products.

Another offshoot of the problem is that small vendors and traders are refusing to accept the latest Re 1 coins without giving any reason.

The RBI regional director said coins were distributed in bulk in the market a shortage of currency notes. "Supply of increased quantity of coins for the last some time could have also led to a large number of coins in the market," Topno said.

He added that at the same time, rumours were spread on social media that the coins of Rs 10 denomination of a particular design was fake.

The regional director said the presence of large number of coins in the market was a good development, as the RBI had been receiving complaints about their scarcity for over the past three decades, and had been struggling to alleviate it.

"The RBI never had the need to take coins back from the market. We have now opened counters at our regional headquarters where coins could be exchanged with currency notes. All the banks have been instructed to take coins as deposits and there is no limit for people on depositing coins, except mercantile transactions," Topno said.