NEW DELHI: Expect a pocketful of toffees by the end of your Diwali shopping this year as, traders claim, loose change has become scarce. Coins of Re 1 and Rs 2 denominations are disappearing fast, they say, adding that they are forced to buy change from unauthorized agents for a premium that's shot up with the rush for festive shopping. Is it a fact, or a ruse for handing out toffees to customers? TOI asked a shopkeeper to call up one such currency agent who provides low denomination notes to several shops in Khan Market. The recorded conversation revealed that the commission on notes and coins ranges from 1.5% to 15%. "Diwali ki wajah se bhav bahut badha hua hai... Sikka toh bahut mehenga hai... 15% se kam nahin milega (rates are high because of Diwali. Coins, especially, are hard to get for less than 15%)," said Ram (name changed), the agent. As per this agent, the going rate for a bundle of crisp Rs 10 notes, which contains 10 packets of 100 notes each, is Rs 400. For Rs 20 notes, it is Rs 500 per bundle. And coin bags (2,500 coins each) fetch a flat 15% commission regardless of the denomination. Market associations claim they have to depend on agents as banks refuse to provide adequate low denomination currency. "Shoppers don't have change, as they withdraw money from ATMs. Almost all customers give us a Rs 500 note. We can't say no to them, so we have to arrange for loose change every day. We need low denomination notes and coins amounting to Rs 4 lakh every month. Banks don't provide us sufficient change, so we have to buy change worth Rs 1 lakh from the market," said BR Gopala, owner of Gopala Sweets in Lajpat Nagar. Following repeated complaints from shop owners, Khan Market Trader Association (KMTA) carried out a survey to find out how many shops source currency from agents, and the average amount they pay. "On average, shopkeepers pay Rs 8,000 to Rs 12,000 to source coins and new notes. Ours is a VVIP market, so we avoid giving soiled notes to customers. Khan Market's monthly requirement of loose currency is Rs 70-75 lakh, but we get only Rs 20-25 lakh from banks. We have informed RBI about the survey, but they have done nothing to address the problem. Most banks say that they don't have low denomination currency," said Sanjiv Mehra, president of KMTA.
While it denied reports of a shortage of coins, Reserve Bank of India accepted that there was a 'slight imbalance' in the demand and supply of small currency. "We have a lot of Re 1 and Rs 2 coins with us. There is no shortage of these coins. The distribution depends upon the supply received from government presses and mints. There may be some transient shortages in particular denominations during the festival season," said Chandan Sinha, Regional Director, RBI. "We have never received any official complaint from banks or individuals regarding agents selling currency (of any denomination). But our market intelligence does suggest that there are stray incidents of small denomination notes and coins being sold at a premium," he added. The problem is severe in markets like Lajpat Nagar, Sarojini Nagar and Chandni Chowk where shoppers prefer to pay cash. Grocers, eateries and chemists generally need a lot of change. "It really pinches us when we have to pay 15-18% for a bag of coins. A lot of shopkeepers have stopped keeping items that cost less than Rs 10. But traders buy change from these agents, as they want to avoid the inconvenience of going to RBI to get the currency," said KS Bakshi, president of Lajpat Nagar Market Association. In Sadar Bazaar, currency agents ply their trade openly. An agent in Sadar Bazaar told TOI that this was the time to stock up on change as the rates would shoot up soon. "We get the currency from banks. The rates will shoot up during the wedding season. The demand for notes of Rs 10, Rs 20 and Rs 50 goes up during the wedding season," said Gaurav (name changed).
TOI
While it denied reports of a shortage of coins, Reserve Bank of India accepted that there was a 'slight imbalance' in the demand and supply of small currency. "We have a lot of Re 1 and Rs 2 coins with us. There is no shortage of these coins. The distribution depends upon the supply received from government presses and mints. There may be some transient shortages in particular denominations during the festival season," said Chandan Sinha, Regional Director, RBI. "We have never received any official complaint from banks or individuals regarding agents selling currency (of any denomination). But our market intelligence does suggest that there are stray incidents of small denomination notes and coins being sold at a premium," he added. The problem is severe in markets like Lajpat Nagar, Sarojini Nagar and Chandni Chowk where shoppers prefer to pay cash. Grocers, eateries and chemists generally need a lot of change. "It really pinches us when we have to pay 15-18% for a bag of coins. A lot of shopkeepers have stopped keeping items that cost less than Rs 10. But traders buy change from these agents, as they want to avoid the inconvenience of going to RBI to get the currency," said KS Bakshi, president of Lajpat Nagar Market Association. In Sadar Bazaar, currency agents ply their trade openly. An agent in Sadar Bazaar told TOI that this was the time to stock up on change as the rates would shoot up soon. "We get the currency from banks. The rates will shoot up during the wedding season. The demand for notes of Rs 10, Rs 20 and Rs 50 goes up during the wedding season," said Gaurav (name changed).
TOI
