Girish Rehani, owner of a pharmacy that sells everything from shampoos to adult nappies, wages a daily battle for change.
Small change, that is. Change—as in coins—has become a constant headache for Rehani. None of his customers pays in coins any more, but each wants his due change.
At Jhankar Chemist in the Capital’s Jangpura Extension area, Rehani’s 12-member staff fan out every day to paanwallahs and temples in search of coins. He has also tried getting coins from Canara Bank and Centurion Bank of Punjab, where he maintains accounts, and they always tell him they’ve run out, and to try the Reserve Bank of India instead.
So, recently, Rehani ventured to its office. He stood in a queue for an hour and secured two bags of Rs2 coins and a bag of Rs5 coins. But when he asked for a bag of Re1 coins, a teller told him he could only get 50-paise coins.
“Now, tell me why should anyone be forced to collect 50-paise coins when customers don’t want them?” he asks.
Retailers have long been used to handing out sweets or a slip of paper as credit instead of exact change. But now they say the growth of both the retail sector and overall economy has created a true supply-demand problem: they receive few coins but must give out many. And customers can be picky about which coins they want; the 50-paise coin is among the least popular.
The coin crunch is not just limited to the likes of Jhankar Chemist; even chains such as Spencer’s and Big Bazaar are suffering. Each says it’s been forced to turn to private coin changers, who charge anywhere from 2-7% commission.
A manager at RPG Enterprises’ Spencer’s outlet in Gurgaon said the chain had been depending on local coin vendors, but recently wrote to HDFC Bank asking for supply as it didn’t want to pay commission any more. Meanwhile, a manager at Big Bazaar, owned by Pantaloon India, had a similar complaint: “When we approach banks, we only get 50-paise coins and not what we actually need.” Both did not want to be identified, citing company policies against speaking to the media.
According to RBI, the number of coins in circulation stands at 84,818 million, of which 41.4 million coins were supplied last year. RBI’s Delhi branch alone issues between Rs8 lakh and Rs10 lakh worth of coins every day. The Re1 and Rs2 coins are disbursed in bags containing Rs2,500 worth of coins.
A senior RBI official, who didn’t want to be named, said coins are supplied to 83 currency chests, the repository of money that commercial banks hold on the behalf of Reserve Bank, across the city. This person would not spell out the amount of coins at the reserve’s small coin depots, nor what their denominations are, but did concede a problem in supply exists. The bank, he said, was recently unable to fill a request of Reliance Fresh, the grocery store chain, for 25,000 coins daily.
“We have given them once, or maybe twice. But it will be difficult to make a daily commitment,” said the official. A Reliance Fresh spokesman declined to comment.
Even public-private partnerships say they are struggling with change while voicing the same discontent for the 50-paise coin.
The Delhi-Noida-Delhi Flyway, a six-lane expressway between Delhi and its growing suburb in Uttar Pradesh, sees roughly 80,000 vehicles a day.
“The customers are resisting acceptance of the coins but for every bag of Re1 coins we have to accept 50 paise coins from the Reserve Bank,” said an official at Intertoll India Consultants Pvt. Ltd, the company in charge of toll collection at the toll bridge.
In order to keep overhead costs low and save the time-consuming and expensive job of counting small money, banks have been reluctant to more efficiently provide coins.
They also have been slow to install note-to-coin change machines, self-help kiosks from where customers can access coins at the press of a button. “Coin operators in the West usually charge a token amount for rendering services, but banks in India stand to gain nothing,” said Ajay Kashyap, chief executive of Inferes Methodex Ltd. Inferes markets note-to-coin change machines made by UK-based Thomas Automatics and has installed 150 in banks, railway stations and temples across India since 2003.
But Kashyap admits it’s tough to convince customers about the utility of machines.
Sometimes, it has even installed machines for free. “The need for coin changes is going to grow bigger, especially since coins worth Rs10 are expected to be introduced in the market,” said Kashyap.
The Union Bank of India, for one, has already installed 12 machines in railway platforms and temples, but chairman M.V. Nairadmits that it’s an expensive proposition. “But we are firming up plans to expand the service,” he said. One machine, with a capacity of 22,000 coins, generally costs between Rs1.5 lakh to Rs4 lakh, he said.
More than cost, trade unions’ fear of machines replacing jobs blocked the Oriental Bank of Commerce’s plans to introduce such a service.
Technically, a customer cannot be refused coins at the bank. But T.S. Bhattacharya, managing director of the State Bank of India, the country’s largest bank, said “it’s highly uneconomical to give coins in small amounts.”
In 2005, Bhattacharya said the SBI’s attempt to introduce coin machines was disappointing. Four machines to change large notes into small notes and another one to exchange small notes for coins were installed at its Mumbai head office. “The experience was bitter because it kept developing technical snags,” he said.
Meanwhile, those in the business of handling coins, concede it can be gruelling. Irfan Saif, vice president of security company Trig Guardforce Ltd, calls it a “big headache.”
Trig handles the ticketing operation for Delhi Metro Rail Corp. and is responsible for collecting and delivering Rs3 lakh worth of coins from the Reserve Bank across 59 metro stations. Of the 500 people it employs, about eight people have been put in duty for keeping tabs on coin counts alone.
But among complaints of depleting coin stocks, the most surprising might come from temples and gurdwaras, who keep stacks of coins in a locked room. They say worshipers are increasingly donating and paying for prasad in bills--and also seeking change. The Delhi Sikh Gurdwara Management Committee, which runs Rakab Ganj, the main gurdwara on Baba Kharak Singh Marg, needs an average of Rs1.7 lakh in coins weekly to operate its cash counters. But all 10 gurudwaras under the committee’s management collect just Rs3.5 lakh per week, and all 10 need coins, too.
The hunger for coins is almost palpable in the basement of the Reserve Bank’s Delhi office. Here, companies and retailers in need of coins rub shoulders with money changers. Men in earrings and untucked shirts loiter outside the bank between 10am and 2pm. If lucky, they secure coins from curt officials at counters—taking the bags to sell across the city. One young man in jeans and a printed shirt, who did not wish to be identified, said he got into the money-changing profession after his fruit shop was uprooted to make way for the Delhi Metro in Moti Nagar. The land he received as compensation to set up another shop does not get customers, so he turned to the business of providing money to make more of it.
“There is no pattern on how the money is given. Sometimes they do, sometimes they don’t give,” the man said about RBI. “But if you know the officials well, it’s easier.” At the bank, an official swiftly moves to the counter and whispers to long-time money-changer Vinod Kumar Gupta that he should return at 2 pm to pick up his coins.
A portly man with greying hair in a white kurta suit, Gupta said later that he never had any trouble in getting coins every day.
But it’s this favouritism that bothers Subhash Choudhury. The employee with Enkay Group, which runs CrazeCoffee outlets, arrives at the RBI for its weekly quota. This week, when he asked for Rs2 coins, the bank said he must accept 50-paise coins instead.