25-Paisa Coins To Go The 10-Paisa Way, Just A Memory

New Delhi, Nov 4 : Inflation bug seems to have hit the Indian currency too. Worried over the growing cost of producing small value coins, the finance ministry has suggested reducing the size of coins so as to ensure that cost of production is brought below the face value of the currency.

As part of the same strategy of cutting cost, the finance ministry has also proposed that the 25 paisa coin may also go ten-paisa way into the history and to the collection of archival value. The Union Cabinet is likely to consider a proposal moved by the finance ministry in which it has has suggested withdrawing of 25 paise or below value coins while re-shaping 50 paise coins and bringing it in the size and weight of a 25 paise coin.
If the ministry has its way then a one Rupee coin would be reduced to the size of a 50 paise coin and Rs 2 coin to the size of a Re 1 coin and this process would continue till the size and shape of Rs 10 coin has been re-shaped. The key reason behind such a decision is that producing currency coins in their present shape and size involves substantial costs and it is on the rise. Rising prices of steel have made Rupee coins worth less than their metal value.

As per proposal, new coins will start coming into the market within six months of the official decision to withdraw the current lot of coins and sent for melting. The measure would be taken to ensure that there is no confusion in the money market because of reduction of the size of coins. The move to withdraw 25 paisa coins will have far reaching impact as the entire accounting system has to reworked on to ensure that transaction of 25 paisa is taken care by rounding off to the next denomination.

At present, notes in India are issued in the denomination of Rs 5, Rs 10, Rs 20, Rs 50, Rs 100, Rs 500 and Rs 1000. Over a period of time, cost benefit considerations led to the gradual discontinuance of 1, 2 and 3 paise coins in the seventies; stainless steel coinage of 10, 25 and 50 paise, was introduced in 1988 and of one rupee in 1992. Some bank branches are also authorised to establish small coin depots to stock small coins. There are 3784 small coin depots spread throughout the country. The small coin depots also distribute small coins to other bank branches in their area of operation.

Rupee coins and small coins include ten rupee coins issued since October 1969, two rupee-coins issued since November 1982 and five rupee coins issued since November 1985. India became independent on 15 August 1947 and was left with a legacy of non-decimal coinage. One rupee was divided into 16 annas or 64 pice, with each anna therefore equal to 4 pice.

Source: The Indian Express