login

Author Topic: MP High Court Summons RBI, Finance Ministry and eBay for Sale of Coins and Notes  (Read 6383 times)

0 Members and 1 Guest are viewing this topic.

Offline Pabitra

  • Honorary Member
  • *****
  • Posts: 1 553
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

The dealers used to collect a team of queue standees who would make several visits by standing in queue and getting bags. On a typical day, this would make a person collect 8- 10 bags and make one days livelihood in 5 hours. Now that is over.

Offline Bimat

  • आदित्य
  • Global Moderator
  • Honorary Member
  • *****
  • Posts: 10 562
  • Mumbai, India.
The dealers used to collect a team of queue standees who would make several visits by standing in queue and getting bags. On a typical day, this would make a person collect 8- 10 bags and make one days livelihood in 5 hours. Now that is over.

I'm not sure but I think you have to provide PAN details, so the same person can't stand in the queue twice...

Aditya
Caution. The low-hanging fruits are still there maybe for a reason.

Offline Pabitra

  • Honorary Member
  • *****
  • Posts: 1 553
That was not so about 5 years back

Offline Abhay

  • Moderator
  • Honorary Member
  • *****
  • Posts: 2 597
Will the next step be banning of Sale of Stamps on the Ebay or Auctions? Going by the same logic, all the postal stamps issued till date, are still legal and can be used for postal purpose at the face value.

So is it going to be the end of the old Hobbies like Philately and Numismatic just because some stupid persons, who have never collected any coins or stamps themselves, nor have encouraged their children to do so, have gone to the courts asking for the Ban?

Abhay
INVESTING IN YESTERDAY

Offline Bimat

  • आदित्य
  • Global Moderator
  • Honorary Member
  • *****
  • Posts: 10 562
  • Mumbai, India.
Will the next step be banning of Sale of Stamps on the Ebay or Auctions? Going by the same logic, all the postal stamps issued till date, are still legal and can be used for postal purpose at the face value.

So is it going to be the end of the old Hobbies like Philately and Numismatic just because some stupid persons, who have never collected any coins or stamps themselves, nor have encouraged their children to do so, have gone to the courts asking for the Ban?

Yeah, exactly the reason why I'm interested in the verdict. It may not come anytime soon though.

If the verdict is in petitioner's favor, it may well give more opportunities to mints to make money though, as they can issue each and every coin in blister for a hefty premium... :-\

Aditya
Caution. The low-hanging fruits are still there maybe for a reason.

Offline dheer

  • Moderator
  • Honorary Member
  • *****
  • Posts: 2 866
  • Indian Coins & Currencies
    • Coins of Republic India
Will the next step be banning of Sale of Stamps on the Ebay or Auctions? Going by the same logic, all the postal stamps issued till date, are still legal and can be used for postal purpose at the face value.
Abhay

Sorry I didn't realize selling of stamps above face value was illegal.
http://coinsofrepublicindia.blogspot.in
A guide on Republic India Coins & Currencies

Offline EWC

  • Meritorious Member
  • ****
  • Posts: 596
Many thanks indeed for all the clarifications!  Questions about small change have interested me for about 30 years, and have become quite big topics in numismatic theory for about the last 15 years – I am thinking about two books – one sponsored by the US Federal Reserve Bank, and written by a Nobel laureate (Sargent, “The Big problem of Small Change”) which I think is crazy, and one sponsored by the “far right” association Cato (written by Selgin “Good Money”) which I think is sophisticated but deeply biased.

Anyhow - as far as I can tell - the sort of problems reported in India today with small change have not raised their head in England since about 1880 – although they were certainly going on in Italy in the 1970’s.

To be honest, I never got to the bottom of the c. 1880 event in England, nor what was going on in Italy in the 1970’s, so I do not suppose its easy to understand what is going on today in India – but I would welcome any thoughts.

What seems to happen today in the UK is the mint swamps the system with huge amounts of small change.  My assumption is that the mint fixes manufacturing costs below face value, and the total value of change is so small compared to the money supply that they are allowed to move out very big supplies indeed.  Am open to correction on that – but if it is correct – why does India not do the same?

Whilst on this topic – I heard a strange story about France about 10 years back.  I wonder if anyone can clarify the charges a business will face paying small change into a bank in France?

Offline dheer

  • Moderator
  • Honorary Member
  • *****
  • Posts: 2 866
  • Indian Coins & Currencies
    • Coins of Republic India
What seems to happen today in the UK is the mint swamps the system with huge amounts of small change.  My assumption is that the mint fixes manufacturing costs below face value, and the total value of change is so small compared to the money supply that they are allowed to move out very big supplies indeed.  Am open to correction on that – but if it is correct – why does India not do the same?

There are multiple issues.
Quite some years back it was the quantity being minted, capacity of mints. However today the capacity is there. It is partly now a distribution problem. i.e. Government is finding it hard to distribute to right places. Banking has changed and now there are private banks who do not want to deal in small coins as they are cost and don't generate any profits.
Further inflation is faster and eroding real value of quite a few denominations. This puts pressure on old coins that are being melted away. Developed countries with small inflation do not have this issue. So once a coin is minted, it exists for long. The recent example of melting was the steel Rs 5 coins introduced in 2007-2008, were melted in Bangladesh to make shaving blades. The metal got changed to Nickel-Brass.

Add is quite a few younger India is moving towards electronic payments and no longer carry small change in pockets, whatever they get is thrown away in a jar at home. So the amount of coins in peoples home has increased substantially. There is also a absence of coin sorters / changers in malls/banks for individuals to periodically put the old coins and get notes.
http://coinsofrepublicindia.blogspot.in
A guide on Republic India Coins & Currencies

Offline EWC

  • Meritorious Member
  • ****
  • Posts: 596
Add is quite a few younger India is moving towards electronic payments and no longer carry small change in pockets, whatever they get is thrown away in a jar at home. So the amount of coins in peoples home has increased substantially.

Yes - The amount in jars in the UK must be vast

There is also a absence of coin sorters / changers in malls/banks for individuals to periodically put the old coins and get notes.

As far as I can tell, change machines in the UK charge 8.9% - but (disgracefully) that does not seem to be clearly marked on them.  I do not think many people use them though – perhaps just an instinctive (and in this case correct) distrust

Your point on inflation is a valid one I had not thought of.  But there is another matter that seems a possible to me.

Around 1880 huge numbers of French 10 centime pieces were imported into the UK from France.  There was a shortage of copper pennies - especially used to pay London Hackney carriage fares apparently.  Questions were raised in parliament and a reform was promised.  But if you look at the mintage figures, the amount of small change did not much increase.  Pennies volumes were increased at the expense of halfpennies and farthings.  So it appears to me there was some unmentioned limiting factor in play.

My guess attaches to the fact that a well known UK retailer – Marks and Spencer – is very proud of the fact it started life on Leeds Market as an “anything for a penny” stall around 1880.  A retail phenomenon not unlike the rise of Woolworths in the 1930’s (by then anything for 6d) and the rise of pound shops today.

But if there was a big rise in 1d stalls on markets around 1880, this may well have been associated with an increase in tax avoidance, and the authorities might possibly have back peddled on small change as a blunt weapon against such tax avoidance.

VAT collection was very aggressive in the UK in the 1970’s, and contributed to the near collapse of the small independent shop keeper in most sectors – the sort of person who traditionally would find it easy to use cash to avoid tax.  High streets here are now dominated by chains, and tax avoidance is arranged by lawyers and has little to do with operations close to the till.  But the India I recall still had an awful lot of small retail enterprises………

Offline asm

  • Honorary Member
  • *****
  • Posts: 5 955
  • Ahmedabad, India
Sorry I didn't realize selling of stamps above face value was illegal.
Not sure Dheer. For notes,itis as an RTI query had revealed.

Amit
"It Is Better To Light A Candle Than To Curse The Darkness"

Offline Bimat

  • आदित्य
  • Global Moderator
  • Honorary Member
  • *****
  • Posts: 10 562
  • Mumbai, India.
I have been informed that Indore Coin Society will argue on behalf of collectors in MP High Court.

Also, many of the collectors who had written to PMO regarding this have got acknowledgment from PMO saying that their request has been forwarded for further action.

Aditya
« Last Edit: July 24, 2015, 07:52:41 AM by Bimat »
Caution. The low-hanging fruits are still there maybe for a reason.

Offline dheer

  • Moderator
  • Honorary Member
  • *****
  • Posts: 2 866
  • Indian Coins & Currencies
    • Coins of Republic India
I have been informed that Indore Coin Society will argue in behalf of collectors in MP High Court.

Also, many of the collectors who had written to PMO regarding this have got acknowledgment from PMO saying that their request has been forwarded for further action.

Aditya

Looks like some good news.
http://coinsofrepublicindia.blogspot.in
A guide on Republic India Coins & Currencies

Offline Bimat

  • आदित्य
  • Global Moderator
  • Honorary Member
  • *****
  • Posts: 10 562
  • Mumbai, India.
The first hearing of the case took place yesterday. All three companies and RBI requested high court a 4 weeks' time for answer, which court agreed. Next hearing in next month...

Aditya
Caution. The low-hanging fruits are still there maybe for a reason.

Offline Bimat

  • आदित्य
  • Global Moderator
  • Honorary Member
  • *****
  • Posts: 10 562
  • Mumbai, India.
In recent hearing, government informed HC that RBI may consider making a new law which will ban selling of currency at a premium. No further developments, wait for next hearing to happen. ;)

Aditya
Caution. The low-hanging fruits are still there maybe for a reason.

Offline Bimat

  • आदित्य
  • Global Moderator
  • Honorary Member
  • *****
  • Posts: 10 562
  • Mumbai, India.
On Thursday, RBI informed MP High Court that under any circumstances, it is illegal to sell legal tender coins or banknotes for a premium (online or any other means). However, there's no law which prohibits people from doing so and finance ministry (i.e. parliament) may amend the law(s) as necessary. Since no official from finance ministry was present during the argument, high court has reserved the decision on this matter.

Aditya
« Last Edit: February 11, 2017, 09:11:17 AM by Bimat »
Caution. The low-hanging fruits are still there maybe for a reason.