MP High Court Summons RBI, Finance Ministry and eBay for Sale of Coins and Notes

[EWC]

I do not think it would be legal any where in the world to trade in circulation notes and coins at a premium or discount.

Am I missing something here?

UK banks routinely levy charges businesses on both the issue and receipt of coin and notes.

Its a long long time since I was in India - but back then I understood this service was run in the bazaars by private businesses

Machines in UK supermarkets "buy" change at 8.9% discount (called a service fee by the operators, but surely called a rip off by any sane person)

[Pabitra]

Only thing you are missing is your understanding of how judicial system works in India.

[EWC]

Only thing you are missing is your understanding of how judicial system works in India.

The quote concerned "anywhere in the world".......................

[dheer]

Just put a coin up for the actual cost of the coin, then bid on how much postage and packaging you'd pay.

Yep. Or put this in Gift Package. Then sell the package. Its the decoration that you are charging, not the coin or note.

[EWC]

Hmmm.  Can someone explain how small change is put into circulation in India these days?  In the UK and I assumed most other places, it is primarily bought at a premium by those with business accounts from the clearing banks, and then given out in change to retail clients.

Well within my lifetime, this service was provided in India by private change booths, who sold change to other businesses at a premium.  Have those change stalls now disappeared?  Do banks provide change to business customers at par?  Are the accounts themselves uncharged?

[dheer]

In India its still RBI and Banks.
1. The RBI runs coin counters in its premises,
a] where individuals can get packets [limited] by standing in queue
b] Coin dispensing machines
c] By registering as a large retailer with RBI and getting large number of coins based on request
d] RBI also runs a coin distribution camp on request and takes a Truck load of coins to designated areas in Mumbai / Delhi to distribute coin at face value.

2. Similarly Banks are supposed to run coin counters [each city has such branches identified]

3. All branches have limited exchange.

[EWC]

In India its still RBI and Banks.
1. The RBI runs coin counters in its premises,
a] where individuals can get packets [limited] by standing in queue
b] Coin dispensing machines
c] By registering as a large retailer with RBI and getting large number of coins based on request
d] RBI also runs a coin distribution camp on request and takes a Truck load of coins to designated areas in Mumbai / Delhi to distribute coin at face value.
2. Similarly Banks are supposed to run coin counters [each city has such branches identified]
3. All branches have limited exchange.

Many thanks.  I take it the private dealers in change I saw in India in the 1970's have now been put out of business by legislation?

Few private people in the UK would ever need to get change in quantity – I suspect in Europe and the USA the situation is the same  - as a personal customer my bank would provide change informally , as a favour, occasionally, for fairly small quantities. 

Regular demands for substantial amounts, paid in or out would require a business account and would attract a charge – about 1.5% each way as I recall.  My understanding is that has been the case now for at least 50 years in the UK – probably a lot longer.

This gives rise to a bunch of questions – but I will start with just one:

do your large retailers mentioned in c] pay a premium for the change, directly or indirectly?

[dheer]

Many thanks.  I take it the private dealers in change I saw in India in the 1970's have now been put out of business by legislation?

The legislation was always there. As to whether private dealers are put out of business ... NO. They are still in business, at times charging 5-8%. Quite a few retailers have started giving out candy for balance small change. Some associations / shops have printed small card/plastic tokens handed out as change.

do your large retailers mentioned in c] pay a premium for the change, directly or indirectly?

There is no direct premium. But the process itself is a premium. They need to get registered with RBI by following the process. Depending on the turn over of an organisation, they are allowed a specific amount of change every month. Then every time they need change, they need to visit the RBI with a letter on company letter head requesting for the change. So there is indirect cost of travelling to RBI center, one persons time for half a day etc. So quite a few innovative small business have gone through the process and invest the time and effort get the coins from RBI and then distribute locally to various shops for fees.

[EWC]

The legislation was always there. As to whether private dealers are put out of business ... NO. They are still in business, at times charging 5-8%.

Many thanks again.  Afraid I am still unclear. 

Are you saying charging a premium for change is illegal, but the law is openly flouted?

[Coinsforever]

What I understood here is main reason  for  such  petition  was last Rajkot exhibition.

3 issues are
1.Republic India currency notes
2.Republic India  circulating & commemorative  coins being sold at premiums
3.Fake coins at 3 sites.

I don't think that either PM or finance ministry will  intervene.
Further more ebay india and other had been clearly discouraging for sale of any fake products  on papers at least, but failed to control.

I don't think it matters a lot to collectors because it is all happening due to various groups who have business  rivalries results into such mess.

Cheers 

[Bimat]

illegal, but the law is openly flouted?

Yes! If you visit RBI head office in South Mumbai, you will have to stand in queue for 3-4 hours and there's a restriction on number of bags you can get for face! (I guess less than 5 per person?) So in nearby areas of RBI itself, you can buy as many bags of coins for a premium (typically 10-15%) if you know the correct person. Most of the small hotels, general stores get their change this way.

Aditya

[dheer]

Are you saying charging a premium for change is illegal, but the law is openly flouted?

Yes it is illegal. Whether its openly flouted or overtly flouted is interpretation  .

[dheer]

Yes! If you visit RBI head office in South Mumbai, you will have to stand in queue for 3-4 hours and there's a restriction on number of bags you can get for face! (I guess less than 5 per person?) So in nearby areas of RBI itself, you can buy as many bags of coins for a premium (typically 10-15%) if you know the correct person. Most of the small hotels, general stores get their change this way.

Aditya

I have been to RBI in South Mumbai, for ordinary person you stand in a queue for whatever time. I guess I stood around 15 mins once and 45 mins the other time. Generally you get one bag. The denomination is also decided by the mood of the teller at the counter.

[Coinsforever]

There are infinite numbers of illegal activities happening but for  numismatic world such activities  are being  exposed more openly. Anti groups intend to create such  exposure while other intend to defend.

Alike every business its a dealers war created by themselves.

Cheers 

[Bimat]

I have been to RBI in South Mumbai, for ordinary person you stand in a queue for whatever time. I guess I stood around 15 mins once and 45 mins the other time. Generally you get one bag. The denomination is also decided by the mood of the teller at the counter.

45 minutes? Guess they have improved the service then. But it it's only one bag per person, then it's not worth the money and time spent. For example, if I decide to visit RBI head office from where I live, I'll have to spend about 70-80 rupees on transport (including railway ticket) plus over 3 hours for two way journey by crowded train. Add to that one hour in queue. Grrr...

Few years ago when I was in Republic India coins, I got couple of bags of commemorative coins with the help of one of my relative. She was (is) in RBI and she happened to be in currency handling department at that time. She even brought a bundle of Rs 5 banknotes for me, all for face and absolutely no efforts involved for anyone! I then lost interest in RI coins, she got promotion and became manager and transferred to old RBI head office. She knows all the tricks dealers use to get coins, fancy number of notes etc etc...

Aditya