Mumbai facing coin shortage
The shortage has hit traders hard, as they have to deal with loss of business and irate customers who often have to forego the difference between the cost of what they buy and the higher denomination notes they hand out, reports Naresh Kamath.india Updated: May 22, 2007 00:58 IST
It is 5 am, but you wouldn’t believe it if you were outside the Reserve Bank of India (RBI) headquarters at Fort. There are long, snaking lines and people milling about like they would at peak hour, though the bank will only open at 9.30 am.
They’re all there to collect coins of Re 1, Rs 2 and Rs 5 denominations, of which Mumbai is currently facing a shortage.
The shortage has hit traders hard, as they have to deal with loss of business and irate customers who often have to forego the difference between the cost of what they buy and the higher denomination notes they hand out. “Customers tell us to shut shop if we cannot provide change,” complains Kishore Shah, president of the Retail and Dispensing Chemists Association. He warns that the 5,500-strong chemists’ association would call for a one-day strike if the problem is not rectified.
It’s not just traders who’ve been affected by the shortage. Even the Brihanmumbai Electric Supply and Transport (BEST) Undertaking, which has always boasted of a surplus of coins, has curtailed their distribution at its five depots in the last month. “We are managing somehow, though,” says BEST Committee Chairman Sanjay Potnis.
At the RBI headquarters, the lines for coins are getting longer. Over 100 people wait in queue on any given day. Each one is allotted a mix of coins of various denominations, amounting to Rs 10,000-Rs 20,000, as decided by RBI officials. That’s Rs 10-20 lakh handed out each day in Re 1, Rs 2 and Rs 5 coins. Those who can’t make it to the coin-dispensing counter by 3 pm have to leave empty-handed.
The RBI has also set up two kiosks that dispense Re 1 coins, with each individual allowed to withdraw Rs 200 worth. Here, too, there is a line of over 50 people.
“I did not get the coins despite waiting for four hours,” says Devang Rawal, who runs a milk shop at Fort. “I am forced to pay ‘agents’ Rs 20 per day for the Rs 200 worth of coins I need.”
These ‘agents’, say RBI insiders on condition of anonymity, are the ones responsible for the shortage. They run a coin-hoarding racket and then charge a commission on change handed out to traders. “These agents are causing an artificial shortage,” says Chandrahas Shetty, president, Association of Hotels and Restaurants. “Hoteliers are forced to buy coins from them; there is no way out.”
However, the RBI says there is no cause for concern. “There is no shortage of coins. We will make arrangements for coins if any association approaches us,” says RBI spokesperson Alpana Killawala. “There are 71 currency chests across Mumbai, which also distribute coins.”