Friday, 12 January 2018

Government stops minting Rs 1, 2 and 5 coins: Here's why?

Government stops minting Rs 1, 2 and 5 coins: Here's why?

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The Indian government has reportedly halted the production of Re 1, Rs 2 and Rs 5 coins as of January 8, 2018, owing to a glut in the market and lack of storage space. 

 The decision was reportedly taken as more than 2.5 million coins are in excess and which haven't been taken by the Reserve Bank of India (RBI) for circulation. Indian Government Mint operates four mints for the production of coins. The mints are located in Noida, Mumbai, Kolkata and Hyderabad. These mints are responsible for the production of coins which in turn are circulated by RBI. State-run Security Printing and Minting Corporation of India Limited (SPMCIL), which runs the mints, had in a directive on Wednesday said the "production of circulation coins is being stopped with immediate effect". RBI sources said the calibration of coin production needs to take place from time to time based on an assessment of the coins in circulation and storage space. Right now, there is no space with banks or the Reserve Bank of India to store the coins. The RBI picks up the coins from the mints for circulation in the market. India's mint houses reportedly have a capacity of 9.5 billion pieces a year of Re 1, Rs 2 and Rs 5 denomination. The Mint Union wants the government to take concrete steps and pick up the manufactured coins from these storage rooms and circulate them. 

OneIndia News (with agency inputs)

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