Discussion: 2005 to 2008 Cu-Ni coins have finally been released in qty!

[The Oracle]

The Dandi maybe in Sanjayji's warehouse ... the clearence sale from there is yet to open 

sanjayji ne is thread se dandi maar diya 

[kansal888]

cover me with gold and i will tell your future 
maybe the 1955 2 anna coins are next.   

Smartie, you're  too tall ... That's too much (fools) gold to arrange for  ... We'll talk about it when you're pushing 90, shrivelled up and hunched back 

Ya he is too tall.. thats why he is dreaming of being covered with gold.
However we can cover Oracle with golden holi colour (UP ishtyle)      ..

If you pay half the worth of that gold to 'friendly neighborhood dealer bhais'; they may deliver 'home made' 1955 2 anna along-with 1949 set...      with Oracle's pics on obverse instead of three lions as bonanza      

[The Oracle]

Ya he is too tall.. thats why he is dreaming of being covered with gold.
However we can cover Oracle with golden holi colour (UP ishtyle)      ..

If you pay half the worth of that gold to 'friendly neighborhood dealer bhais'; they may deliver 'home made' 1955 2 anna along-with 1949 set...      with Oracle's pics on obverse instead of three lions as bonanza      

sanjay ji you seem to be very intimate with home made coins.  is there something we dont know?   

[The Oracle]

guess what released today the 2 rs large size 1990 the party continues 

[anand]

Any reason why the banks have been holding onto huge stock piles of these coins for more than 20 years?

[anand]

just thought about this while reading through. i know it may seem silly

considering the rupee value at that time and now, isnt releasing these coins now a kind of loss? the inherent metal value would have gone up. not to be giving ideas but the recent stainless steel rupee coins were being melted to make blades, what other things can be thought up to be made from the 5 rupee coins.

[rrjadhav76]

Exactly! I've been wondering the same:
- why government was sitting on these coins for 20 years? Especially when there has been shortage of coins in the circulation?
- bullion value of these coins now would be higher than the face value. Wouldn't it be more appropriate to melt them unless minting cost of new coin is higher than the bullion value of the old coins.

[Figleaf]

The answer may be LIFO (last in - first out). This is an often used inventory management "method", where the last items received are stocked in such a way, that they are the easiest to give out as new demand arises. It works for non-perishable goods, but it means that the oldest items in stock will take the longest to be given out.

India was going very well up to some time. Therefore, new coins were in high demand, mintages were high and stocks relatively low. When the economy started slumping, inventories started to build up and coins of previous years started gathering dust, as new coins were added. As either demand is picking up or supply is still going down, inventories are getting to the point where older coins are issued again. This may actually be a sign that the Indian economy is doing better again.

This would also clarify the cost question. The coins were struck long ago and have been languishing since. In bureaucratic eyes, the cost of minting has already been made and re-melting the coins woud only add further cost. Indeed, the operations of selling the metal  and minting new coins in cheaper metal may yield less profit than the cost of re-melting. Be grateful.

It may look silly to apply LIFO to commemoratives, since they are "perishable". However, in bureaucratic eyes, they probably look the same as the definitives and so they are treated the same. Coin collectors' interests obviously do not enter in this equation.

Peter

[paisepagal]

Interesting ... Makes sense to some extent .... I think though for accounting purposes, India is mostly aligned with ifrs which doesn't allow LIFO accounting... That's the preserve of us gaap.
But you are right, perhaps the govt sees inflation declining and commodity prices too , enough to release the coins that they'd not be hoarded and melted down immediately.

[Figleaf]

My above post is on inventory management, not accounting. See the wikipedia lemma linked to above, which explains the accounting bit. I know Dutch banks, the Dutch mint and the UK mint apply LIFO inventory management for coins and banknotes. BTW, I am surprised to read India doesn't apply either full IFRS or full US GAAP.

Peter

[paisepagal]

My above post is on inventory management, not accounting. See the wikipedia lemma linked to above, which explains the accounting bit. I know Dutch banks, the Dutch mint and the UK mint apply LIFO inventory management for coins and banknotes. BTW, I am surprised to read India doesn't apply either full IFRS or full US GAAP.

Peter

It's part of an upcoming exam ... So I know a thing or two about it  .... But yes, India is not ifrs compliant though that is the final objective...

[Pabitra]

Since the RBI is to give up coin distribution, it has stopped getting coins from the mint;
As a result, the vaults are getting cleared.
The old coins, whose sacks were lying buried, are now coming out;

In case of vaults, the fresh stock was being put on top and taken out whn required.
Since more material was coming in than going out, it was piling up.

In other words, it was simple LIFO with cut off being date of fresh inward stocks.

LIFO or FIFO are for accounting perishable goods or those items whose prices vary.
In this case, since the credit was given the day stocks were received, the need not be any accounting policy requirement.
After all it is money at face value.
Only in case of currency notes ( which are promissory notes of RBI, except One Rupee note, when made), both the entries are made to the account only on the day of issue.

[anand]

so in case of old stocks piling up, can we soon expect other mints also to open up their stock piles (if any) and release them?

[Pabitra]

Mints are not authorised to issue coins to general public.
They used to supply exclusively to RBI branches.

Try those RBI branches who are still issuing coins to general public. Some of them have exhausted their sstock wheres others are likely to be touching the bottom of their stockpiles.

[asm]

It appears that this distribution has upset a lot of dealers. There was not even one dealer selling the new commemoratives during the coin fair in Ahmedabad last week-end. A few had Kuka Movement coins but that was all..........

Amit