RBI decision restricting coin supply across their counters has resulted in a severe shortage, say shopkeepers; advise switching to notes for smaller denominations too
THE next time you*re turned away by a shopkeeper when you ask him for change, spare a thought before you start cursing him for not being civil.
The retailers, chemists and hoteliers in the city find it tough with a severe shortage of coins
For, retailers, chemists and hoteliers in the city are finding themselves grappling with a severe shortage of coins of one-, two- and five-rupee denominations.
The situation is so bad, say shop owners, that they often don*t even have enough coins to see them through a day*s transactions and are thinking of reverting to a coupon system (see box) that they had used during the last coin shortage in 2000.
They have even asked the Reserve Bank of India (RBI) to print paper currency in these denominations instead as it would be cheaper than minting coins and would put an end to the crisis.
The Retail and Dispensing Chemist Association recently wrote a letter to the RBI informing them about the trouble being faced by chemists. Over 5,500 medical shops across the city are registered with this association.
Dhamjibhai Palan, chairman of the association, said, "The problem surfaced in October when the RBI restricted coin supply across their counters and, instead, directed us to collect the coins from local banks where we have savings accounts.
However, when we visit the branches, they tell us they have not received any such instructions and do not have enough coins to meet the demand. We are thinking of reintroducing the coupon system."
"Our chemists need coins worth Rs 3-5 lakh per day, but they are simply not getting enough," said Janardhan Shigwan, an office bearer.
In reply, the RBI sent the association a letter on October 15, 2010 (MiD DAY has a copy), which states that the Reserve Bank manages currency distribution through currency chests at 19 places, which are extensions of its issue department.
These currency chests meet the day-to-day demand of the bank branches which, in turn, meet the demand of businesses and the general public.
J D Shetty, ex-chairman, coin committee, AHAR, which has over 8,000 hotels and eateries registered with them, said hoteliers are facing the same problem.
"On an average, every hotel needs coins worth at least Rs 60,000 to meet their requirements, which they are not getting anymore."
Kamlesh Barot, president (western India), hotel and restaurant association, said, "The only way to cope with the coin crunch is to have the RBI restart circulation of paper currency in one-, two- and five-rupee denominations. It will be cheaper for them and will be easier to carry for the common man."
The Other Side
Alpana Kilawala, chief general manager (communications), RBI, however, said there is no shortage of coins in circulation. "We have a special arrangement to give large quantities of coins to associations like those of retailers, chemists and hoteliers. However, if they have any difficulty or local banks have any doubts, they can approach us and we will do the needful."
Palan said chemists were forced to follow a coupon system in early 2000, when they faced a similar shortage of coins. A chemist would write down the balance on a piece of paper and then put his initial with a rubber stamp. The customer could then use the chit in any medical shop in lieu of cash.