Financial Daily from THE HINDU group of publications
Friday, Dec 26, 2003
Financial Daily from THE HINDU group of publications Friday, Dec 26, 2003 |
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Money & Banking
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RBI & Other Central Banks Govt plans to issue coins of Rs 10 denomination — To redesign Rs 2, Rs 5 coins N.K. Kurup
Mumbai , Dec 25 The Government is expected to introduce 10-rupee coins and redesign the existing Rs 2 and Rs 5 coins as per the recommendations of the Reserve Bank of India, a senior RBI official said. The intrinsic value of Rs 2 and Rs 5 is said to be higher than their face value as these coins contain nickel, the price of which has gone up in the recent past. Therefore, the metal mix in these coins needs to be changed, the official said. An expert group of RBI, which studied the coins in circulation, had suggested redesigning of Rs 2 and Rs 5 coins and continuation of the existing Re 1 coin, which is made of steel. The group has also suggested introduction of Rs 10 coins. The RBI, in consultation with the National Institute of Design, Ahemdabad, has short-listed four designs for the new coins and sent them for the Finance Ministry's approval, the RBI official said. The central bank had last week made a presentation on the proposed Rs 10 coin to a select gathering consisting of representatives of chambers of commerce, and bulk users of coins such as Railways and MTNL. The response from the users on the advantage of the high-denomination coins has been encouraging, the official said. If everything goes as planned, the Rs 10 coins will be in circulation in the next three to six months. Currently, Rs 10 notes account for 23 per cent of the total currency in circulation. While the average life of a currency note is estimated to be 18 to 20 months, a coin of the same value has 10 to 15 years longevity. According to Mr Vepa Kamesam, former RBI Deputy Governor, in charge of currency management, the percentage of 10 rupee notes in circulation should ideally be lower. In fact, at one time, Rs 10 notes accounted for nearly 40 per cent of the currency in circulation. The issue of redesigned Rs 2 and Rs 5 coins will not involve large capital investments at the Mint as the designs have been made in such a way that the existing machines can be used to make the redesigned coins, said the official.
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