UP: Now ‘coin-bandi’ hits Kanpur traders as banks refuse to take small change | india-news | Hindustan Times
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UP: Now ‘coin-bandi’ hits Kanpur traders as banks refuse to take small change

Bank say they are overloaded with coins and do not have enough chests to keep them

india Updated: Jul 01, 2017 11:30 IST
Several government offices and traders in Kanpur are not accepting payments made through coins as banks are not taking  small change.
Several government offices and traders in Kanpur are not accepting payments made through coins as banks are not taking small change. (REUTERS File Photo for representational purpose )

Small change has become a big problem in Uttar Pradesh’s Kanpur with several government offices and traders refusing to accept coins.

They attribute their refusal to banks’ reluctance to take deposits in coins due to lack of chests to keep them.

Gyanesh Mishra, general secretary Akhil Bhartiya Vyapar Mandal, said non-acceptance of coins by banks is posing serious problem for the traders in Kanpur.

Many in the wholesale kirana business are left with coins worth about Rs 2 lakh each, while the retailers on an average have a stock of coins worth Rs 6-7 lakh each, Mishra said.

According to him stockists and agents were the worst sufferer of the unofficial “coin ban” with each of them sitting with coins worth at least Rs 6-7 lakh.

Sources said there are about Rs 100 crore of coins currently in circulation in Kanpur.

The bizarre situation has forced the traders to pay salaries to their employees in coins, Ashok Kesarwani, senior leader of SP Vyapar Sabha said.

This again is creating problem for the employees who are now unable to use the money as banks and shopkeepers are not accepting coins.

After the demonetisation of high value currency notes in November last year, the RBI had issued coins worth crores of rupees to meet the scarcity of currency notes. However, now many traders, banks and even government offices like Kanpur Electricity Supply Company (KESCo) are refusing to accept payment made through coins.

According to KESCo MD Ashutosh Niranjan the company itself is finding difficult to deposit coins worth Rs 9 lakh it received from power consumers as banks are not depositing them.

“We are unable to utilise this money. As such, it is not possible for us to accept bills paid through coins,” he said.

According to the Reserve Bank of India (RBI)’s communication manager Dipesh Tiwari, “No one can refuse to accept Indian currency. In case anyone refuses to do so, people should complain to the competent authority.”

On its part, the RBI however cannot take the surplus coins because as per rules it can only exchange soiled/ damaged currency notes and coins.

According to sources, the State Bank of India has coins worth Rs 7 crore, Punjab National Bank Rs 3 crore, Bank of Baroda Rs 2.5 crore, Union Bank Rs 2 crore, Central Bank of India Rs 2 crore and Allahabad Bank Rs 1 crore.

“We don’t have enough space to keep such a huge amount of coins. Unless the chests are cleared, it will be difficult for us to accept fresh deposits in coins,” said SK Singh, DGM, Punjab National Bank.

Sanjay Katiyar of Vijay Nagar alleges that he went to Allahabad Bank’s local branch to deposit Rs 10,000 in cash. “I had coins of Rs 800. The clerk took the notes but refused to accept the coins. He did not give any reason for that,” Katiyar said.

In Allahabad, some banks make part payments in coins due to which the flow of small change in markets has suddenly increased.

“As banks don’t have enough paper currency stock, it is making some small payments in coins of Rs 10, Rs 5 and Rs 2 denominations,” said a senior bank officer not wanting to be named.

He, however, claimed they were not refusing deposits in coins.

In the city power department, nagar nigam and jal sansthan are not accepting payments in coins.

In Varanasi, businessman Rajkumar Sharma said the market is flooded with coins.

He said banks generally refuse to accept coins as it takes a lot of time to count them.

To alleviate the problem, which is snowballing into a major crisis, some banks in Kanpur said they are working out plans to deal with the situation.

As per the plan being worked out, sources said, an individual might be allowed to deposit Rs 1,000 in Rs 10 rupee coins.

(With inputs from HTC Allahabad & Varanasi)