The Hindu Business Line : The coin cycle

This refers to the recent report on coin shortage in Coimbatore and Chennai (Business Line, October 12). Our country undergoes a unique cycle once in about three years, two years of surpluses of coins followed by a year of shortage. Its pattern closely resembles the Cobweb Cycle in the production of agricultural commodities.

According to the latest Annual Report of the RBI, the Bank’s indent for coins was either nil or limited in the last two years as its vault had been overflowing earlier. Now it will overreact to the shortage and place a massive indent for the next year, paving the way for the recurrence of the cycle.

Recently, this writer visited the Banking Hall of the RBI in the Fort area of Mumbai and found only one-rupee coins available. The staff advised him to contact his bank as the distribution of coins is decentralised.

Two of his banks tell him that they do not get the supplies from the RBI, as required. They have only one-rupee coins available. But the hitch is that the RBI supplies them to banks in bags of Rs 2,500.

While it may be useful to hotels and shops what can the average citizen do with such a large amount? One cannot get change in smaller amounts because the bank staff do not seem to like the idea of counting.

A. Seshan Mumbai