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4 Government Mints Stop Coin Production Over Lack Of Storage Space

DIVYIA ASTHANA | 0
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| January 11 , 2018 , 09:41 IST

Coins are one of the oldest forms of currency, however, the production is cumbersome, as well as storage of the coins, compared to the value they hold. Due to a glut in the market and lack of storage space, 4 government mints in Kolkata, Mumbai, Noida and Hyderabad have stopped production of coins, government sources said on Wednesday.

The state-run Security Printing and Minting Corporation of India Limited (SPMCIL), which runs the mints, said in a directive on Wednesday that the "production of circulation coins is being stopped with immediate effect".

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The SPMCIL notice added that at present there were 2,528 million pieces of circulation coins lying in the government mints.

According to Reserve Bank of India sources, calibration of coin production is required from time to time based on an assessment of the coins currently in circulation and available storage space. RBI reviews the supply and usage of the coins and then informs the Department of Economic Affairs (DEA) which then communicates with the SPMCIL.

The banks, however, have run out of storage space, mainly due to the demonetised currency deposited with them after the demonetisation announcement in November 2016.

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RBI sources added that the reduction in minted coins is temporary, and takes place regularly to ensure a smooth supply of coins to the public.

"If such an exercise is not undertaken, there can be a backlash or push-back from the public, wherein it will stop accepting that denomination of coin of which there is an excess," a source said.

The decision was met by protest by the employees of the mints, with 1,400 employees at the Kolkata mint protesting, since their pay would likely be affected by the halt in coin production.