“We distributed it to about 3,000-4,000 people, each received a minimum of Rs100 worth of coins. That’s all we were able to give, and that, too, got exhausted,” said Suchde.
The problem, he says, is more acute in villages around Rajkot. “But there’s nobody to listen or receive complaints. In the town, whether you buy petrol or use a Xerox machine, nobody returns the money or you get a chocolate worth Rs2,” he added.
Local solutions
As Mint reported on 16 March 2007, small businessmen were sending their staff out to scour paan shops and big retailers were paying a commission of between 2% and 7% to private money traders to secure supplies.
Maroor Padmanabha Pai, who runs an automobile retail business in Mangalore, still says he depends on a temple, 40 miles away, for supply.
“It’s an all-India problem. Which bank is going to give you coins? There are no coins,” says Pai.
Others have sought to evolve collective solutions. A year ago, the Mumbai-based Indian Hotel and Restaurant Association, tied up with banks— HDFC Bank Ltd, ICICI Bank Ltd and Syndicate Bank to obtain between Rs15,000 and Rs25,000 worth of coins every week. The association has 5,000 members; a group of 50-75 members secure coins by rotation every week.
“I won’t say every member gets their quota. Neither is it sufficient because each of them needs Rs1,500-2,000 worth of coins every day. Those who need more have to now buy from a money trader after paying 8% commission,” says Nikhil Shetty, a committee member. At present, the association is talking to State Bank of Bikaner and Bank of Baroda to extend its reach.
A collective approach is also working for the Retail and Dispensing Chemist Association, a body of 5,500 chemists, which is also based in Mumbai. It has tied up with UTI Bank, HDFC and ICICI and recently with the State Bank of India to replenish stock every week; the RBI informs them where its supply is headed and members visiting the local bank carry a letter from the association for assured supply. About Rs 3-4 lakh worth of coins are supplied every week, which are then divided among 10 selected chemists.
“There is always a conflict between a customer and seller when you can’t give the exact change,” said Prasad Danave, the Association’s secretary. “Some shopkeepers manage because they have contacts with small vendors and peanut sellers, others have tied up with mandirs (temples).
The finance ministry’s Mayaram said the RBI has been asked to draw up a road map by December for coins circulation and disbursal options, such as through rural cooperative banks, post offices and chambers of commerce.