India Government Mint stops minting coins to avoid glut
, ET Bureau|
Jan 10, 2018, 05.14 PM IST
KOLKATA: India Government Mints across the country have halted minting of coins from Wednesday as Reserve Bank of India has slowed down the process of lifting coins considerably from these units creating a glut-like situation.
The state-run Security Printing and Minting Corporation of India Ltd (SPMCIL) has issued a direction on Wednesday to this effect as the mints ran out of storage capacity.
"In compliance to the direction received from SPMICL this is for the information of all employees that the production of circulation coins in the India Government Mint, Mumbai, shall be stopped immediately," said a notice issued by India Government Mint's Mumbai unit Wednesday.
SPMCIL runs four minting units in Mumbai, Kolkata, Hyderabad and Noida.
A highly placed source in RBI said that the central bank slowed down the process of lifting coins because it does not have capacity to store them in its vaults which are mostly full with demonetised Rs 500 and Rs 1000 notes. The government's demonetisation move in November 2016 had made high value bank notes invalid which were about 85% of total bank notes in circulation. The exercise aimed at unearthing black money had forced general public to deposit old high value notes in banks.
The SPMCIL direction, however, did not go well with employees who used to earn hefty sum for working overtime for past several months.
"The Mint will now follow normal working hours without any overtime with effect from January 9 till further orders," India Government Mint Mumbai said in a notice.
Sources said that the direction is unlikely to impact circulation of coins as the Mints have a huge value of coins waiting to be picked up by RBI.
The minting unit at Noida said it has 252.8 crore pieces of coins in its stock as RBI has stopped lifting coins from it.
Total value of coins in circulation grew by 14.7% in 2016-17, while the total volume of coins in circulation rose by 8.5%, RBI's annual report for 2016-17 said. Coins of Re 1 and Rs 2 together constituted 69.2% of the total volume of coins in circulation, while in value terms, these accounted for 44.8%.
The state-run Security Printing and Minting Corporation of India Ltd (SPMCIL) has issued a direction on Wednesday to this effect as the mints ran out of storage capacity.
"In compliance to the direction received from SPMICL this is for the information of all employees that the production of circulation coins in the India Government Mint, Mumbai, shall be stopped immediately," said a notice issued by India Government Mint's Mumbai unit Wednesday.
SPMCIL runs four minting units in Mumbai, Kolkata, Hyderabad and Noida.
A highly placed source in RBI said that the central bank slowed down the process of lifting coins because it does not have capacity to store them in its vaults which are mostly full with demonetised Rs 500 and Rs 1000 notes. The government's demonetisation move in November 2016 had made high value bank notes invalid which were about 85% of total bank notes in circulation. The exercise aimed at unearthing black money had forced general public to deposit old high value notes in banks.
The SPMCIL direction, however, did not go well with employees who used to earn hefty sum for working overtime for past several months.
"The Mint will now follow normal working hours without any overtime with effect from January 9 till further orders," India Government Mint Mumbai said in a notice.
Sources said that the direction is unlikely to impact circulation of coins as the Mints have a huge value of coins waiting to be picked up by RBI.
The minting unit at Noida said it has 252.8 crore pieces of coins in its stock as RBI has stopped lifting coins from it.
Total value of coins in circulation grew by 14.7% in 2016-17, while the total volume of coins in circulation rose by 8.5%, RBI's annual report for 2016-17 said. Coins of Re 1 and Rs 2 together constituted 69.2% of the total volume of coins in circulation, while in value terms, these accounted for 44.8%.
