Demand for Coins at All Time Low

[Bimat]

A local newspaper today has reported that demand for coins has reached all time low in India. The four Indian mints, which used to deliver up to 9 billion coins a year in 2016 are now producing only about a billion coins a year only, and those coins too do not have sufficient demand and many sacks of coins are now lying  in mints' vaults. Reason for low demand for coins are several: Easy accessibility to payment apps like GPay, BHIM UPI, PhonePe etc., rising inflation (so ₹1 and ₹2 coins are almost worthless), pandemic (contactless payments).

It is feared that if the situation remains unchanged, the mint staff will not have enough work in hand and some drastic measures may have to be taken.

This also explains why we are not seeing any circulating ₹5 (or any other denomination) commemorative coins lately, and only surcharged collector packs are being issued.

Below are the clips from the article (in Marathi)

Aditya

[krishna]

During happier times....

[Bimat]

Nostalgic indeed.

Since the situation is not expected to improve (or rather, will become even worse for the mint), will we really need four mints going forward? Any sensible government would close three out of four mints in such situation (so most probably, only Mumbai mint would survive.) Can mints continue to sustain on their own just by selling a ₹5 commemorative coin in a blister for ₹200-₹300? Or just by selling proof sets for ₹4000-₹5000?

Aditya

[krishna]

They refine gold and mint coins for religious institutions and governments

Export orientation is required

But they can't be disposed off so unceremoniously

[Bimat]

The local newspaper which published the story on decreasing demand for coins has now published a follow-up article on the same (in Marathi)... Still can not find link to original news!

Aditya

[Bimat]

Export orientation is required

Interesting proposition. Who are the likely clients for the Indian mint(s); given that India can most likely offer minting coins at lower rates?

Europe already has more mints than it actually needs. US/Canada are out too, so are East Asian countries since they already have their own advanced minting facilities.

That leaves only Africa where India can actually aim for potential central bank contracts for minting fresh coins. But given the very low spending value of coins in majority of the African countries, can India actually offer a good, win-win kind of a  deal?

Aditya

[krishna]

They have entered into a supply agreement for export of bank notes to nepal
They have done minting for thailand and Srilanka (no 100% sure) in the past

[chrisild]

Interesting proposition. Who are the likely clients for the Indian mint(s); given that India can most likely offer minting coins at lower rates?

The strange thing is, in my opinion, that many mints (or minting locations) do not have an enormous number of staff but are somehow considered to be prestigious. That would apply to possibly reducing the number of locations in India, but also to third countries which currently still have mints that are not really profitable ...

Which leaves – which regard to producing coins for other customers – those countries that do not have "their own" mints anyway. There are quite a few, in Africa but also the Caribbean area, and usually the tenders and subsequent contracts are for a couple of years and maybe certain denominations only.

[Navaneeth]

Nostalgic indeed.

Since the situation is not expected to improve (or rather, will become even worse for the mint), will we really need four mints going forward? Any sensible government would close three out of four mints in such situation (so most probably, only Mumbai mint would survive.) Can mints continue to sustain on their own just by selling a ₹5 commemorative coin in a blister for ₹200-₹300? Or just by selling proof sets for ₹4000-₹5000?

Aditya

The collectors will stop collecting if 15-20 commemorative coins are issued every year at ₹4000-₹5000 each. The UPI transactions will slowly come down once they start charging the transaction fee. Many shops in southern rural areas and tier 2 cites started disagreeing on UPI.