Discussion: 10-Rupee Fails to Circulate

[Abhay]

Coin collectors generally understand a coin will typically last longer in circulation than will a bank note. Since a coin will be more cost effective the trend worldwide in recent years has been to issue coins in place of the lowest denomination bank note for reasons of economy.

India is one of the more recent countries to make such a move. The 10-rupee Reserve Bank of India bank note was replaced with a coin during 2009. It now appears the coin may not be the success the Reserve Bank of India hoped it to become.

According to July 11 stories released by Press Trust of India and a host of domestic newspapers the coin does not appear in circulation very often. The PTI story states, "Experts have different opinions on the matter. While some say that since the dual metal coin resembles the euro, people often keep it as a souvenir; others are of the view that 10–rupee coins becoming popular is just a matter of time."

The United States has struggled for years to get a dollar denomination coin to be accepted by the public. Part of the problem appears to be that since the bank note of the same denomination has not been withdrawn the public still has a choice which to use. It appears India hasn't learned from the example of the United States.

Canara Bank spokesman Raj Kumar told PTI, "The [10-rupee] coins have not become popular as people prefer to carry the note which is available in abundance."

What's worse is that Kumar added, "Similar is the case with 5-rupee coins." Yes, it appears the RBI hasn't withdrawn the 5-rupee bank note either, despite the fact there is a coin of the same denomination in circulation! Kumar continued that the demand for 1- and 2-rupee bank notes is increasing since bank notes in these denominations either are difficult to find or when found are in such poor condition people don't want to use them.

The July 12 Sriraj Digital Magazine blog said, "There were three speculated reasons on why this [shortage] could be happening: Resemblance with [the] European Union's euro and hence people preserving them; the 'looks like gold coating' around the coin, and hence people preserving them for fun; and availability of 10-rupee notes and hence find no reason to use the 10-rupee coin."

The blog continues, "While I certainly have a pile of 10-rupee coins at home, I'm not sure I preserved them for any of the three reasons above ... Being from a banking family, I had a chance to see the 10-rupee coin long ago, probably as soon as they entered the market. At the beginning, I just used to give them to shop owners like any other coin when I purchase something. Sometime's when I'm short of few rupee's, this new 10-rupee coin used to come to my rescue. The shop owners happily accepted this new coin even though it was as loss of few rupees to them. They even asked me to bring few 10-rupee coins when I turn up the next time.

After the initial bunch of 10-rupee coins that I had were distributed to various sources around me, the next bunch of coins landed in my house, thanks to my banker father. Now, it's time for one each for friends and family."

The 10-rupee coin has a diameter of 28 millimeters, a weight of eight grams, and is a ringed bimetal issue with a nickel-bronze ring and ferrous steel center. Most of the coins have been reported to be struck at the Mumbai and Noida mints.

Source : Numismaster

Abhay

[Bimat]

While some say that since the dual metal coin resembles the euro, people often keep it as a souvenir[...]

Why do they mention only euro? Now more than 120 countries have circulating bimetallics (although some are pseudo issues like those of Galapagos,Darfur etc etc) and bimetallic coins aren't so unusual as they were in 1980s.(Italy first issued them in 1982).

But that's a good read.I still have to get a tenner in change..I'll get it..someday..

Aditya

[Prosit]

The problem with that is that you lose a lot of security features notes can provide.  The one pound coin comes to mind.  Got to be the most counterfeited coin in history doesn't it?


Dale

Coin collectors generally understand a coin will typically last longer in circulation than will a bank note. available in abundance."

[Bimat]

The problem with that is that you lose a lot of security features notes can provide.  The one pound coin comes to mind.  Got to be the most counterfeited coin in history doesn't it?

That's a good point,but not applicable to our ten rupees banknote.(about equal to 20-22 cents).In India,heavily counterfeited denominations are 1000 and 500.So replacing the 10 rupees banknote by a coin won't be a problem....

Aditya

[repindia]

It is very difficult to get these in the market. I was not able to get even a single one in the last two months. The government does not make efforts to distribute them and then complain they do not circulate!

The point about the novelty of the coin might be valid, but Rs 10 is still a big amount for the majority of the Indian public and I do not see the coins being hoarded much. Does anyone remember the brass 20 paise coins and how these got melted for jewelery?

[chrisild]

The problem with that is that you lose a lot of security features notes can provide.  The one pound coin comes to mind.  Got to be the most counterfeited coin in history doesn't it?

Guess that many central banks - well, of those that issue low value paper money at all - may not put a lot of effort into such notes. After all, they are relatively expensive to make (compared to high denominations) but stay in circulation for a very short period of time only. And yes, it seems that the £1 coin has been counterfeited more often than other coins with similar values ...

Interesting by the way that, when you want to view the 10 Rs coins at the RBI website, it will not tell you anything about them ...
http://www.rbi.org.in/scripts/ic_coins.aspx

Christian

[mumbapuri]

Though I do agree that a 10coin is still not as freely available as 1/2/5, it is still fairly available to locate in circulation (or atleast in Mumbai). Now the frequency depends and varies from place to place and person to person.

After the initial euphoria/enthusiasm/curiosity it will be more easier to find in interiors of the country as pple start parting with them. One has to remember, India is a big country both it terms of its geography and demography. It would add to the delay of circulation.

On the flip side, the older 1/2/5 coins are still circulated widely in the interiors. Also, some of these coins get passed on quite easily in train journeys, or maybe I have had beginner' luck. Another case, while on the look out for these 10coins, i managed to get hold of the old 5rupees coins (the big coins featuring gandhi/nehru) in the interiors...

Honestly, I think it will take atleast another 2-3 years before it becomes a common sight, or when pple realise that its no big deal to stash on those bimetallic coins that they start using them. Another pointer are the 1970s brass 20paise coins which pple melted/stashed thinking of it as gold..

[Abhay]

I have seen this coin circulating in Delhi, but mostly by big departmental stores and shops, who get the coins in bulk from the RBI for circulation. Whenever I got these coins, they were almost new, and the store or shop had them in bulk.

Even I got a Bag of 1000 coins from the RBI, and I have distributed these coins to the workers in my factory for the salary, which happens to be in a small place. To my surprise, most of the workers have kept the coins with them and they have not spent them. But the main reason for this is that they have seen these coins for the first time. So, it is just a matter of time, as mumbapuri has said, as people will spend these coins, once they are freely available in circulation.

Abhay