Author Topic: Legal Tenders  (Read 1337 times)

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Offline quaziright

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Re: Legal Tenders
« Reply #15 on: October 02, 2018, 01:41:07 PM »
Since this is an informal discussion going on in an online forum, the usage of the term "pegged" should have been construed in a more loose sense rather than the strict sense in which it has been. More so because, the common perception, world wide, since Bretton-Woods, is that USD is the new gold.

Maybe it’s a cultural thing, but if you are talking about a subject that is relatively technical such as the definition of legal tender, then you should know how to use technical language accordingly. When you talk about a “peg” in the context of currencies, it has but one meaning, “fixed exchange rate”.

Moreover, there are 193 countries in the UNO, with more than 60 that maintain a peg with the US, around 25 with the Euro, 2 with India etc. That still leaves a large part of the world with market based floated convertible currencies.

It’s also a cultural thing from where I come from that if you make a mistake, there’s no harm in acknowledging it and we all learn and move forward ;)

Offline Rabi_R

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Re: Legal Tenders
« Reply #16 on: October 02, 2018, 02:46:08 PM »
The text you have pasted is from section 6,



The text mentions Sec 4, right? It was taken from Sec 6 because there is a correlation that explains why proofs are not legal tenders.
Following extracts from the two sections should give you some more hint -
"Coins may be minted at the mints......." - Sec 4
"Coins issued under the authority of section 4......." - Sec 6

I also told you to read the Act in it's entirety. I had a reason. There is clue to be found in the definition section.

Offline Rabi_R

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Re: Legal Tenders
« Reply #17 on: October 02, 2018, 03:03:13 PM »
Maybe it’s a cultural thing, but if you are talking about a subject that is relatively technical such as the definition of legal tender, then you should know how to use technical language accordingly. When you talk about a “peg” in the context of currencies, it has but one meaning, “fixed exchange rate”.

Moreover, there are 193 countries in the UNO, with more than 60 that maintain a peg with the US, around 25 with the Euro, 2 with India etc. That still leaves a large part of the world with market based floated convertible currencies.

It’s also a cultural thing from where I come from that if you make a mistake, there’s no harm in acknowledging it and we all learn and move forward ;)

If you had read my comment carefully, you would have noticed just after writing "pegged", i have written "at the time of writing",the two contradicts each other. Therefore, the conclusion is, "pegged" was not used in it's strictest sense.
It is also a cultural thing from where i come from, nitpicking is generally laughed at.

Offline quaziright

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Re: Legal Tenders
« Reply #18 on: October 02, 2018, 03:11:12 PM »
That’s quite funny indeed considering you were nitpicking on someone else’s comment about some Commemorative coin relating to spelling of a proper noun (something about Jaganath). Anyways, there’s nothing further to contribute from my end as far as this topic is concerned. People will read this and the other discussions and draw their own learnings; that for me is enough. So I’ll stop here!

Offline Rabi_R

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Re: Legal Tenders
« Reply #19 on: October 02, 2018, 03:19:37 PM »
That was about identifying a fake. The original and fake have different spellings. If you find these two situations analogous then i can't but appreciate you sense of logic. Actually i am mincing words here because i am not a native English speaker. I would have enjoyed this even more in my mother tongue.

Offline kansal888

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Re: Legal Tenders
« Reply #20 on: October 02, 2018, 03:44:04 PM »
1) Not all coins issued under Coinage Act are legal tenders, but coins issued only under specific sections are legal tenders.

Dear friend

Can you please explain coins issued under which section of the Coinage Act are legal tenders and coins issued under which section are not legal tenders?

Regards
Sanjay Kansal

Offline Rabi_R

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Re: Legal Tenders
« Reply #21 on: October 02, 2018, 04:04:06 PM »
Dear friend

Can you please explain coins issued under which section of the Coinage Act are legal tenders and coins issued under which section are not legal tenders?

Regards
Sanjay Kansal

Dear friend,
Matter is not like black and white and nothing in between. See, this Act has a specific definition of "issue". Not in the general sense we used the term today morning. Issue means " to put a coin into circulation for use as money".
 Section 6 states "Coins issued under the authority of Section 4 shall be a legal tender" Thereafter types of legal tender are defined, which we need not discuss.
Now let's go to Section 4. Section 4 starts with the following words - "Coins may be minted at the Mints...." This is the only instance in the entire act where it has been stated what is to be done at the mint. Selling of proof coins by mints are not mentioned anywhere in the Act. Neither does Section 4 mention the mints as issuing authority.
 So it is clear that the selling of proof coins by mints does not come under the purview of the Coinage Act. Now any activity by any individual, institution or authority that is not covered by the Coinage Act has nothing to do with legal tenders. Therefore, coins issued by RBI are legal tenders and coins sold by mints are not, although both have been minted as per provisions of Coinage Act.

Offline kansal888

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Re: Legal Tenders
« Reply #22 on: October 02, 2018, 04:57:47 PM »
Dear friend,
... So it is clear that the selling of proof coins by mints does not come under the purview of the Coinage Act. Now any activity by any individual, institution or authority that is not covered by the Coinage Act has nothing to do with legal tenders. Therefore, coins issued by RBI are legal tenders and coins sold by mints are not, although both have been minted as per provisions of Coinage Act.

Dear Friend

Your interpretation of the Coinage Act is faulty. In fact Coinage Act does not make any distinction between coins issued by RBI and coins sold by mints.

It is clear in Section 2 (definitions) read along-with other Sections of the Coinage Act that coins are legal tenders:

Quote:
(a) "coin" means any coin which is made of any metal or any other material
stamped by the Government or any other authority empowered by the
Government in this behalf and which is a legal tender including commemorative
coin and Government of India one rupee note
Unquote

Quote:
(b) "commemorative coin" means any coin stamped by the Government or any
other authority empowered by the Government in this behalf to commemorate any
specific occasion or event and expressed in Indian currency;
Unquote

Regards
Sanjay Kansal

Offline Pabitra

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Re: Legal Tenders
« Reply #23 on: October 02, 2018, 04:58:06 PM »
Wow, I suppose a coin collector doesn’t really need a basic grasp of economics to be in this hobby. So here’s a link which can be useful for you explaining why countries peg their currencies to the dollar.

Yes, I agree that a coin collector does not need to be knowing economics.

Pegging with Dollar is a desirable thing for every nation but does every nation happen to be in financially viable position to be able to do it successfully over a long period?
In other words, when it is pegged, the dealers of that nation are saved the botheration of quoting exchange rate of multiple currencies against local currency. This also prevents local population, the facility to do arbitration and hence finding more optimal valuation of that currency.

Venezuela is a current example.

Offline Rabi_R

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Re: Legal Tenders
« Reply #24 on: October 02, 2018, 05:06:00 PM »


Your interpretation of the Coinage Act is faulty. In fact Coinage Act does not make any distinction between coins issued by RBI and coins sold by mints.

How will Coinage Act make distinction? For making distinction, first it has to be acknowledged that mints sell coins. If that is acknowledged, then what mints sell will come under the purview of the Act. Coinage Act  states coins can be minted at the mints, and that's all the Act states, nothing more.


I don't wan't to continue this discussion any further. If you seriously believe proof coins are legal tenders, you should not have any problem  giving me those and taking from me their face values in currency notes.

Offline kansal888

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Re: Legal Tenders
« Reply #25 on: October 02, 2018, 05:15:57 PM »
How will Coinage Act make distinction? For making distinction, first it has to be acknowledged that mints sell coins. If that is acknowledged, then what mints sell will come under the purview of the Act. Coinage Act  states coins can be minted at the mints, and that's all the Act states, nothing more.

Dear friend

Your interpretation is again wrong.

The Central Government has authority to 'make' coins. It can exercise this authority through existing mints of SPMCIL or a mint of foreign country or a maybe a private mint in future.

Similarly, the Central Government has authority to issue coins. It can very well exercise its authority through RBI or through mints or maybe some other organization in future.

Please show me the section of Coinage Act which says coins can be issued only through RBI

Regards
Sanjay Kansal

Offline Rabi_R

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Re: Legal Tenders
« Reply #26 on: October 02, 2018, 05:22:53 PM »
No where it is written RBI will be the only issuing authority, that however, does not make proof coins LT.

Anyway, when are you giving me your proof coins?

Offline andyg

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Re: Legal Tenders
« Reply #27 on: October 02, 2018, 07:56:18 PM »
No where it is written RBI will be the only issuing authority, that however, does not make proof coins LT.

Why would proof coins not be legal tender?
always willing to trade modern UK coins for modern coins from elsewhere....

Offline Rabi_R

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Re: Legal Tenders
« Reply #28 on: October 02, 2018, 08:00:45 PM »
Why would proof coins not be legal tender?

Because, you cannot sell legal tenders.

Offline kansal888

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Re: Legal Tenders
« Reply #29 on: October 02, 2018, 08:06:07 PM »
... Section 6 states "Coins issued under the authority of Section 4 shall be a legal tender"..

....So it is clear that the selling of proof coins by mints does not come under the purview of the Coinage Act. Now any activity by any individual, institution or authority that is not covered by the Coinage Act has nothing to do with legal tenders. Therefore, coins issued by RBI are legal tenders and coins sold by mints are not, although both have been minted as per provisions of Coinage Act.

No where it is written RBI will be the only issuing authority,...

Dear Friend

You had earlier posted that coins 'issued' by RBI are legal tenders and those 'sold' by mints are not. Then after some time, you accepted that no where it is written that RBI is not the only issuing authority. Are not you contradicting yourself?

Taking your logic of word 'issued' forward,  I will post irrefutable proof that high denomination coins are  legal tenders. If you have ever  read any Gazette Notification of Indian coins, you might have noticed this language: "The coins of the following denominations shall also be coined at the Mints for issue under the authority of the Central Government"

I am posting extract of one such Gazette Notification for Rs 10 and Rs 500 coins on 3rd India Africa Forum Summit. It says that coins of Rs 10 and Rs 500 will be 'issued under authority of the Central Government. You will notice that both the denominations - Rs 10 as well as Rs 500 are treated in a similar manner. There is no difference whatsoever that Rs 10 will be issued and Rs 500 will be sold. Your conclusion that one of the denomination is legal tender and other is not is wrong.

This means Central Government has  exercised its authority to issue the coins of both denominations - Rs 10 as well as Rs 500.

Regards

Sanjay Kansal