Author Topic: Officially accepted - shortage of coins  (Read 600 times)

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Offline Pabitra

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Officially accepted - shortage of coins
« on: September 23, 2015, 06:54:29 PM »
The RBI report confirms that mints were able to supply around half the quantity for which orders were placed.

See

https://www.rbi.org.in/scripts/AnnualReportPublications.aspx?Id=1154

Offline Figleaf

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Re: Officially accepted - shortage of coins
« Reply #1 on: September 23, 2015, 08:38:50 PM »
Not accepted, but acknowledged. A good thing, even after three years (probably more) because you cannot start to address a problem before you have acknowledged that there is a problem. Among the suggested solutions, I find these interesting:

VIII.7 The Reserve Bank has suggested to the Central Government to permit import of coins as a short term measure till the production capacity of the mints is augmented; consider allowing minting of coins by private parties as enabled under the Coinage Act, 2011; and increase the present production capacity of mints/ set up new mints as a medium term measure. The Reserve Bank is also working on ways to encourage recirculation of coins by members of the public.

The reserve bank (the government) has suggested to the central government (the government) to permit them (the reserve bank, the government) to order coins abroad as long as the mints (the government) does not have the capacity to make enough coins. This looks like an interesting area to cut red tape, useless laws and the number of civil servants, especially those who do not realise they work for the same government as the other guys.

Outsource part of the coin production to private enterprise? Who will provide security? What if security is broken, e.g. some sinister guys get their hands on a mother die? Interesting, but needs more thought.

The rest is all standard civil servant silliness. If you can't increase capacity in the short run, more mints are just more waste, especially "as a medium term measure". Another campaign to exhort people to use their small change will just increase the short term value of small change, so it is bound to fail and may be counterproductive.

If Modi calls Posco tomorrow, he can have a huge number of coins in Indian ports in two months time (maybe less) at an attractive price.

Peter
An unidentified coin is a piece of metal. An identified coin is a piece of history.

Offline dheer

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Re: Officially accepted - shortage of coins
« Reply #2 on: September 24, 2015, 05:51:09 AM »
Finally ... all these years the press statement would mention that there is adequate quantity of coins and no shortage ...
http://coinsofrepublicindia.blogspot.in
A guide on Republic India Coins & Currencies

Offline Pabitra

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Re: Officially accepted - shortage of coins
« Reply #3 on: September 24, 2015, 07:20:08 AM »
The mint was converted to a corporation so that they could expand the capacity. The have doubled the capacity but there seem to be some bottlenecks which are holding them back. No one seems to explain that in a coherent manner.
They have outsourced bimetallic blanks. Now, of all the current coins, only 10/- coin has plain edge. All others, including 50 Paise coins, are with reeeded edge. It is against standard practice. All over the world, since the times of Sir Isaac Newton, higher value coins are with reeeded edge as a security measure, to counter clipping.
The reason for that is to assure private corporations of continued demand for bimetallic blanks. They have invested in Schuler presses but to reduce capital expenditure, they have not been forced to invest in edge reeding machines.
India had imported minted coins when there was an acute shortage. Mints who won tenders were all over the world e.g Canada, Moscow, South Korea, Mexico, Kremnica, South Africa, UK .
With present policy of Make in India, import of minted coins is highly unlikely.
Blanks may be imported.
For that, some lower denominations coins may be made in to plated steel. Then private corporations can be assured of business and expected in invest in plant and machinery. See VIII.7 on page 108 of the report.
The committee has been formed and report expected in due course.See VIII.20 on page 112 of the report.