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Mumbai faces coin shortage

Mumbai faces coin shortage
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First Published: Tue, May 22 2007. 12 29 AM IST

Updated: Tue, May 22 2007. 12 29 AM IST
Mumbai: It is 5am, but you wouldn’t believe it if you were outside the Reserve Bank of India headquarters at Fort. There are long, snaking lines and people milling about like they would at peak hour, though the bank will only open at 9.30am.
They’re all there to collect coins of Re1, Rs2 and Rs5 denominations, of which Mumbai currently faces a shortage.
The scarcity of coins has hit the trading community hard as it has to deal with loss of business and irate customers who often have to forego the difference between the cost of what they buy and the higher denomination notes they hand out. “Customers tell us to shut shop if we cannot provide change,” complains Kishore Shah, president, Retail and Dispensing Chemists Association. Shah warned that the 5,500-strong association would call for a day’s strike if the problem isn’t solved.
It’s not just traders who’ve been affected by the shortage. Even the Brihanmumbai Electric Supply and Transport (BEST) Undertaking, which has always boasted of a surplus coins, has curtailed their distribution at its five depots in the last month. “We are managing somehow, though,” says BEST committee chairman Sanjay Potnis.
At RBI headquarters, the lines for coins are getting longer. More than 100 people wait in queue on any given day. Each one is allotted a mix of coins of various denominations, amounting to Rs10,000-20,000, as decided by RBI officials. That’s Rs10-20 lakh handed out each day in Re1, Rs2 and Rs5 coins. Those who can’t make it to the coin-dispensing counter by 3pm have to leave empty-handed.
RBI has also set up two kiosks that dispense Re1 coins, with each individual allowed to withdraw Rs200 worth. Here, too, there is a line of more than 50 people. “I did not get the coins despite waiting for four hours,” says Devang Rawal, who runs a milk shop at Fort. “I am forced to pay ‘agents’ Rs20 per day for the Rs200 worth of coins I need.”
These “agents”, say RBI insiders on condition of anonymity, are the ones responsible for the shortage. They run a coin-hoarding racket and then charge a commission on change handed out to traders. “These agents are causing an artificial shortage,” says Chandrahas Shetty, president, Association of Hotels and Restaurants. “Hoteliers are forced to buy coins from them; there is no way out.”
RBI says there is no cause for concern. “There’s no shortage of coins. We will make arrangements for coins if any association approaches us,” says RBI spokesperson Alpana Killawala.
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First Published: Tue, May 22 2007. 12 29 AM IST
More Topics: Money Matters | Currency |