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Uttar Pradesh: As banks toss away coins, traders face the flip side

Banks have imposed an undeclared ban on deposit of coins which has left small businessmen in a fix.

lucknow Updated: Dec 04, 2017 16:23 IST
Haider Naqvi
Haider Naqvi
Hindustan Times, Kanpur/Allahabad/Lucknow
Uttar Pradesh,Coins,RBI
Small traders, retailers and vendors throughout Uttar Pradesh are helplessly watching their stock of coins swelling as banks – both public and private – are turning them away.(HT Photo)

A priest at a prominent temple in Uttar Pradesh’s Mirzapur district approached the state finance minister Rajesh Agarwal a few months ago with an unusual problem.

His bank was refusing to accept the coins, which the temple received as offerings from the devotees, without citing any plausible reason.

The minister directed the officer concerned to look into the issue and the problem was solved to the priest’s satisfaction.

But not everyone is as lucky as the priest.

Small traders, retailers and vendors throughout Uttar Pradesh are helplessly watching their stock of coins swelling as banks – both public and private – are turning them away.

Banks have imposed an undeclared ban on deposit of coins which has left small businessmen in a fix.

Traders are making representations and holding protests in various parts of the state while in some districts it has become a law and order issue.

Many vendors and auto-drivers are not accepting coins as they consider it illegal tenders.

“We are facing problems as banks are not accepting coins. Our money has been blocked which is affecting trade,” said president of UP Adarsh Udyog Vyapar Mandal Sanjaya Gupta.

He has earlier staged a demonstration at the Lucknow Collectorate and has also threatened to lay siege to the regional branch of the Reserve Bank of India (RBI) if banks did not deposit coins of retailers.

Who will clear the air?

As confusion over the fate of coins continues, neither the Reserve Bank of India nor the government is doing anything to allay the concerns of traders.

Officials at RBI’s regional branch in Kanpur refuse to speak anything on the record.

“Do you know how many have lost their jobs for speaking to the media? RBI’s Kanpur office is doing its bit. We have sternly asked the banks to accept coins. It they are not accepting coins, how can we force them?” said an official on condition of anonymity.

He said only the main office in Mumbai was authorised to speak to the media.

When the HT mailed queries to the RBI’s Mumbai office, the bank’s spokesperson Ajit Prasad sent a one-line reply saying Rs 10 coins were legal tenders across the country.

He did not reply to the query regarding the status of coins of other denominations and also why banks are not accepting Rs 10 and other coins if they are legal tenders.

Prasad also remained silent on the question if the RBI had issued any advisory to banks in this regard or proposed to take action against errant banks.

It is interesting to note that during demonetisation, the same banks had been forcing customers to take bags of coins when they went to exchange their old Rs 500 and Rs 1,000 banknotes.

State general secretary of Laghu Udyog Bharti Ravindra Singh said he met RBI officials a number of times but they pleaded helplessness saying the central bank was a mere facilitator to the government of India that issued the coins.

Small businesses go for a toss

A number of products like toffees, match box, pencil, eraser and balloon cost less than Rs 5. Producers and traders who deal in such items receive a lot of coins every day.

More than 150 bread manufacturing units in Uttar Pradesh have big collection of coins because of which their working capital remains blocked.

Members of the UP Bread Manufacturers’ Association (UPBMA) recently came up with a list of more than 50 specific complaints with the name of firms that went to deposit coins and the branches of banks that did not entertain them.

However, no action was taken on any complaint.

In a desperate attempt to get their voices heard, a few traders triggered a controversy that grabbed media attention. ( HT Photo )

“Most of the banks are accepting coins worth Rs 1,000 only in a week, that too in current accounts. This has become a major problem for traders,” said president of Akhil Bharatiya Udyog Vyapar Mandal Sandeep Bansal.

“The market is flooded with coins. Where should we deposit coins?” asked Suresh Chablani of Lucknow Udyog Vyapar Mandal.

“Why were the coins issued in such a huge quantity if banks couldn’t take it back? People think we are harassing them but think of the agony of traders. We cannot refuse coins from customers and banks are not accepting it,” he said.

In Allahabad too, traders have accumulated several lakhs of rupees in coins and are finding it hard to deposit in banks or store it safely.

“I have coins worth over Rs 1 lakh. I tried to deposit it in my bank account but the employees refused to accept it. Customers take some coins as change but other traders do not take it in bulk,” said Sachin Jaiswal, a spice trader in Allahabad’s Mutthiganj area.

Matter of facts
  • Kanpur being an industrial centre is the worst hit by the coin crisis in UP.
  • Coins worth Rs 200 crore were pumped in by the RBI in Kanpur after demonetisation.
  • Coins worth Rs 100 crore poured in through business from other states.
  • On an average, every trader has coins worth Rs 6 lakh.
  • Even beggars are requesting for currency notes as shopkeepers are not accepting coins from them.
  • Currency notes of Rs 50 and Rs 200 denomination not in circulation as yet.

“I get coins from customers but distributors and dealers want payments in currency notes of Rs 100 or above. Many people are also refusing to accept Rs 10 coins which do not have a Rupee symbol on it. There is a rumour that such coins are fake,” said Ashish Gupta, who owns a paan kiosk in Civil Lines area.

A traders’ leader in Kanpur Gyanesh Mishra said: “This currency is dumped with the people. I know many people who have coins worth Rs 10 lakh. No one knows what to do with it.”

The RBI has issued instructions to banks to accept Rs 1,000 in coins every day against one current account. However, banks have created their own rules.

In Kanpur, when traders try to deposit coins, they are asked to go back and get them weighed as counting of coins is a tedious job.

The amount of Rs 1,000 in Rs 10 coins weighs 770 grams and traders have to give an undertaking that they would be responsible if the coins weigh less.

“No bank has weighing machines. We get the coins weighed and then put a slip and give an undertaking,” said Parikshit Mehrotra, a businessman on Mall Road.

“Do we mint coins? Banks have thousands of reasons not to accept coins,” said Yogesh Gupta, who runs a confectionary business.

In Kanpur, the RBI circulated coins worth Rs 200 crore post-demonetisation.

Law and order issue

The crisis has also led to a law and order problem.

Last week, two men were brought to Kanpur’s Barra police station who threw blows at each other even as the policemen held them by their collars to control them.

One of them was left with a broken nose while the other had bruises all over his neck.

At the heart of their battle was a coin of Rs 10.

Krishna Kumar Singh, an employee with a private firm, bought paan masala from a betel shop owner Lalmani Nanku and gave him Rs 10 coin but he refused to take it and demanded a banknote instead.

“After two hours, they had a patch-up and returned home. This was the third such incident in a week where people fought over refusal to accept coins,” said station officer, Barra, Bhaskar Mishra.

The Kanpur police have attended to 25 cases of fight over coins.

As coins make regular transactions difficult, traders are holding protests on a regular basis. They have organised more than 40 demonstrations and have met all the authorities with no success.

In a desperate attempt to get their voices heard, a few traders triggered a controversy that grabbed media attention.

The wholesale traders of small items put up hoardings and posters likening Prime Minister Narendra Modi with North Korean dictator Kim Jong-un to highlight the deluge of coins affecting their businesses.

The posters came up on October 12, the day when chief minister Yogi Adityanath was in Kanpur to attend the state executive meeting of the BJP.

“We wanted to draw the attention of the CM and others to our problems. We needed help,” said Raju Khanna, the trader who put up the posters.

Khanna, along with 21 others, is underground as the police have suo motu registered a case against them.

A police sub-inspector Rajesh Awasthi lodged the FIR under sections 505 (conducing public mischief with statements), 153 (provocating with intent to cause riot) and 32 (3) of the UP Special Powers Act.

Superintendent of police, South, Ashok Verma said investigations were on in the case.

“We have been agitating for eight months. It is hurting us badly now. If no solution is found out, we will stage a sit-in on the RBI’s premises,” said secretary Kirana Vyapar Mandal, Gopal Sardana.

Authorities take note, finally

The state government and legislators have finally taken note of the problem.

“We have taken up the issue with the State-level Bankers’ Committee (SLBC) asking them to take action against the banks if there are specific complaints that they are not accepting coins,” director, institutional finance, Shiv Singh Yadav said.

RBI guidelines clearly instruct banks to take coins from customers. ( HT Photo )

He said coins were the currency of the government of India and nobody could refuse it.

Bharatiya Janata Party MLA from Chayal constituency in Kaushambi district Sanjay Gupta has also come forward to help traders in depositing coins in banks.

He announced a reward of Rs 5,000 to a person who shoots the video of bank employees refusing to accept coins as deposits. He has also promised strict action would be ensured against such employees.

Gupta himself visited several branches of various banks in his constituency and got the coins deposited in his presence.

“RBI guidelines clearly instruct banks to take coins from customers. I have announced a cash reward if somebody shoots the video of bank officials refusing to accept coins. I will write to the RBI against such employees and lodge FIRs against them,” he said.

--Inputs from Kenneth John, Brajendra K Parashar and Anupam Srivastava

First Published: Dec 04, 2017 15:45 IST