Irked by the number of coins you get through the day, which end up lining

your wallet? It isn’t just you — thanks to the general preference for currency
notes and a higher production of coins following demonetisation, the Reserve
Bank of India (RBI) is now facing a serious problem of plenty.
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In meeting after meeting of the Currency and Coin (C&C) Division in the
Ministry of Finance, the central bank has been raising the issue of what it
describes as the “reverse flow” of coins. As a result, the government is looking
at alternative modes of transportation, as well as privatising the distribution of
coins. Due to high indents and the slow lifting of coin consignments by the
RBI, the potential for exporting coins to countries such as Brazil, Sri Lanka,
and the Maldives is also being examined.
The minutes read, “RBI informed that presently there is a reverse flow of coins
and there are approximately 9 billion pcs of coins with chest of RBI. The main
issue with coins is of storage and the buildings holding
To end the glut of coins, govt mulls privatization of distribution, exports coins
are on the verge of collapsing due to weight…”
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The same minutes point out that should there be a “longer term reduction in
the coin demand”, the indents for coins should be reduced for a longer period
and that the SPMCIL can plan for either export of coins and/or a reduction of
capacity. This is because the current indents for coins given by the RBI is a
staggering 8,700 million pieces for the year 2020-21, and an even higher
9,800 million pieces for 2021-22.
The problem of storage of coins was also discussed at a previous Production
Planning Meeting (PPM) held on October 3, 2018. The non-lifting of coins by
the RBI due to a shortage of storage was discussed at the meeting.
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The minutes of this meeting state: “RBI representative agreed to lift the coins
as per the indent but raised the concern about insufficient space with RBI to
keep stock of coins. CMD SPMCIL stated that they are exploring alternate
ways for distribution of coins.”
While taking up the options for coin distribution, a “non-official” model was
discussed, wherein the distribution network would be “privatized by engaging
non-regulated entities”, and the government would have to bear an additional
cost.
A set of minutes note, “If such an alternate distribution channel may be more
efficient and increase the usage of coins in India, necessary legal changes will
be brought about.”