MUMBAI: A tug-of-war has erupted between traders' associations and the Reserve Bank of India (RBI) over dispensing of loose change for business. Shopkeepers allege the RBI is keeping its coins close to its currency chest. The bank, in turn, accuses unscrupulous storeowners of misusing its facility to melt coins and extract metal to make illegal profit. Coins are produced at government mints across the country. The RBI's currency chest, which is the sole carrying and forwarding agent, then transfers them to bank branches which become retailers for petty change. Businessman Sidharth Jain, who owns a medical store in the Fort area, says that the RBI has referred all shopkeepers to their respective banks to procure change. "We, for instance, require coins to the tune of Rs 20,000 a month. Initially, our needs were met by the RBI but once we approached the local bank branch, it only agreed to give us change worth Rs 2,000," he says. "Now even that is not available. We are forced to ask customers to hand out coins of all denominations, which causes friction at times." Federation of Retail Welfare Traders' Association president Viren Shah has written to the RBI to say that his members are inconvenienced by the central bank's reluctance to provide change. "We are being denied coins of Re 1, Rs 2 and Rs 5. Local banks that are obliged to give loose change as per RBI guidelines are declining this facility saying they, in turn, do not receive change from the RBI," Shah says. This is causing concern to businessmen who are sometimes forced to pay 15-20% extra to procure change from agents. Shah has urged the RBI to ensure a resolution before demand peaks during the upcoming festival of Diwali and traders are exploited further.
However, sources in the Reserve Bank allege that their hand has been forced by certain storeowners with "dubious reputations" who have been making illegal use of loose change. "These traders are creating pressure groups to procure vast amounts of loose change in order to melt coins and extract the metal. We do keep a tab on the volume of coins that individual shopkeepers procure from us and we have found that these shopkeepers seek far more than their requirements for normal business transactions," says a senior RBI official.
This, if true, is a serious criminal charge that could invite prosecution and penalty. It is a well-known fact that coins of certain denominations are worth more than their face value once they are melted down to extract metal. However, common shopkeepers like Jain say they are unaware that coins can be misused in this manner, and wonder why all should suffer for the sins of a few.
TOI
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