Bengaluru: Rs 10 coins pile up at banks, eat into their cash limits

BENGALURU: Bank branches in Bengaluru are housing sackfuls of Rs 10 coins, issued by the Reserve Bank of India, which hotels and the general public are refusing to accept.
The coins were among the small change released by RBI to cater to the hotel industry’s requirements. Every month, RBI releases coins of Rs 1, 2, 5 and 10 denominations to bank branches to meet the needs of hotels. Among the coins released in January, more than 50% were of Rs 10 denomination, but they have only added to the stock of dead cash piling up in bank branches since the Centre announced demonetisation in November 2016.

“At some point of time after demonetisation, misinformation about a ban on Rs 10 coins gained credence among people. Since then, people are not accepting these coins and they are increasing in branches,” said a senior official of a nationalised bank whose branch has a stock of Rs 10 coins valued at around Rs 8 lakh. In normal course, the branch wouldn’t have had coins worth more than Rs 50,000, he added.

Bank branches are feeling hemmed in by the coins as they are allowed to hold only a limited amount of cash depending on their transactions. In many branches, the dead stock of Rs 10 coins has crossed 25% of the cash limit.

Since the Rs 10 coin is legal tender and the RBI’s policy mandates that coins and notes of lower denominations should be in circulation, the apex bank is not taking back the coins. It is also asking banks not to refuse to accept Rs 10 coins from customers.

However, several bank branches are sending back customers, saying they have no space to stock the coins, which only strengthening the public perception that the coins have been banned.

“Time and again since November 2016, RBI has been saying that Rs 10 coins have not been banned. Banks are advised to accept them for transaction and exchange at all branches,” said an official from RBI’s issue department.

Hoteliers said they are not taking Rs 10 coins since people are not accepting them at their counters. As a cascading effect, shopkeepers too have stopped taking coins from consumers.

“What we sought from RBI was release of Rs 1, 2 and 5 coins. But more than half of the stock released comprised Rs 10 coins,” said P Rao, secretary of Bangalore Hoteliers Association. “Last week, we met RBI officials and apprised them of the existing problem. We hope they will address the issue,” he said.

Bank officials said RBI should take steps to widely publicise the validity of Rs 10 coins and create awareness.

“While it is the collective responsibility of both RBI and bank branches to dispel the misconception about Rs 10 coins, RBI has to take back the piled-up stock from banks and hold it till their burden is eased,” said MS Mahabalesawra, managing director and chief executive officer of Karnataka Bank.