The Hindu Business Line : Two sides of coins

While on the one hand the central bank is regularly getting complaints about shortage of coins, on the other, many RBI offices in the country are facing a problem of reverse flow: people returning these coins!

In the current fiscal, the reverse flow has been substantially large, said an RBI official. "At some of our offices we have long queues of people waiting to return coins," he said.

The RBI said it has come across reports and received complaints that traders and shopkeepers are reluctant to return the small change on grounds of non-availability of coins, particularly 25 and 50 paise denominations.

According to RBI, there is no shortage of coins with the offices of RBI and also banks.

RBI has allowed its offices to hire private transport operators to distribute coins to the interior parts of the country. Services of postal authorities, co-operative banks and rural banks were utilised to distribute coins to rural areas.

According to RBI's annual report for 2003-04,the demand for coins, particularly of lower denominations, had declined considerably. The central bank has directed all banks maintaining currency chests to accept coins from public either for exchange or for deposits.

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