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| India-Pakistan |
| Mysterious shortage of coins grips Calcutta |
| 2007-06-16 |
| A mysterious coin shortage gripping Calcutta has shop-keepers begging for change from beggars and buying coins at prices above their face value. No one knows exactly why there is no change in the eastern Indian city, but the situation has spurred the Reserve Bank of India to emergency measures, distributing millions of coins to try to satisfy the demand. Since the coin shortage became acute in early June, the bank has distributed five mill-ion rupees ($121,950) worth of coins, including a million on Thursday alone, said Nilanjan Saha, the bank's treasurer in the city. But the emergency supplies have failed to stem the demand. "There is no reason for it ," said Saha. "But I have heard reports that some unscrupulous traders are melting coins because the face value of the coins is lower than the metal value." |
| Posted by:Seafarious |
| #14 I bet most young Rantburgians won't know what you mean, Zen. Wouldn't be the first time, Deacon. |
| Posted by: Zenster 2007-06-16 21:54 |
| #13 Why should they have to smuggle the coins to melt them down. The coins belong to the bearer, don't they ? When the metal in the coin becomes more valuable than the coin's face value, then the host country should combine the metal with something cheaper. This isn't exactly new. |
| Posted by: wxjames 2007-06-16 21:35 |
| #12 #3 phil - I remember getting candy (peppermints) instead of small-value centesimi (equivalent of pennies) in change in Italy back in the early 1970's. I thought it was seriously weird. |
| Posted by: Barbara Skolaut 2007-06-16 21:13 |
| #11 I blame the fuse boxes. I bet most young Rantburgians won't know what you mean, Zen. Pennies wuz good to have in the 50's and60's during a thunderstorm in South Alabama. |
| Posted by: Deacon Blues 2007-06-16 19:13 |
| #10 Some say the coins are melted and the metal used to make shaving blades—one Re 1 coin equals three shaving blades worth Rs 2 each. Which still beggars the question of how much the smelting energy costs? Even if they used "free" charcoal harvested from local The humble Lincoln penny is headed for the same fate. Which is why I have a glass five gallon water bottle full of them. It's my "401K-In-A-Jar". |
| Posted by: Zenster 2007-06-16 09:10 |
| #9 Yep. Pre '70 copper cents are worth about 3 times face value if you care to collect. Even the zinc's are getting valuable! Har! Even the least of us..... Now if 5 cent pieces were made out nickel.... |
| Posted by: HalfEmpty 2007-06-16 09:07 |
| #8 pretty obviously it's the Joooos, melting them down to make metal matzoh balls...one of the lesser known protocols of the Elder Zionists |
| Posted by: Frank G 2007-06-16 08:45 |
| #7 The humble Lincoln penny is headed for the same fate. |
| Posted by: Nimble Spemble 2007-06-16 06:52 |
| #6 KOLKATA: There are two sides to the story: the crime and the end-use. The crime is confirmed: Indian coins of small denominations like 25 paise, 50 paise, Re 1 and Rs 2 are being smuggled out to Bangladesh, where they are melted and put to varied uses. The end-use is a subject of intense speculation. Some say the coins are melted and the metal used to make shaving blades—one Re 1 coin equals three shaving blades worth Rs 2 each. Some say the metal is used for making idols of gods and goddesses. Some others say the shine on the metal is useful for making ornaments. Whatever it is, something’s on, and from the Reserve Bank of India (RBI) to Kolkata Police to the Border Security Force, everybody seems to be on high alert. In the midst of all this, the coins are disappearing fast—so fast that RBI had to pump in 900 million pieces of fresh coins only in May to restore the demand-supply imbalance. Right now, the central bank says there isn’t any shortage although the demand is surging. Cut to the security guys. BSF ADIG (G), North Bengal Frontier, SS Sandhu said, “We have heard of it from our jawans and from the rural areas that we patrol. But we have never had any major seizure so far along the frontier, at least on the Indian side”. The Indo-Bangla border in north Bengal is 1,066 km long and BSF is on the prowl for one of those “stone-chip filled bags” that are supposed to smuggle coins out of the country. Well, that is the modus operandi. Smuggler contacts on the Indian side at Changrabandha, Hili, Gojadanga, Phulbari and Phansidewa confirm that “consignments” are usually of small plastic bags containing 10 kg of Indian coins, which are shoved inside larger sacks of “small-sized stone chips used for construction work”. Ingenious, isn’t it? Why stone-chips? Because, there’s a whole lot of construction work going on in that side of the border and stone chips are exported legally and also smuggled out from India. Customs points and BSF outposts through which these bags pass are equipped with small metal detectors, not very sophisticated ones, which are not able to detect the small bags of coins inside the stone-chip sacks. Along a border through which 30 rivers flow down from India to Bangladesh, searching for one such small plastic bag is more difficult than locating a pin in the proverbial haystack. And mind you, north Bengal may not be the only point on the 4,095 km Indo-Bangla border through which these bags of stone chips may be crossing over. West Bengal alone shares 2,216 km of the border followed by Tripura 856 km, Meghalaya 443 km, Mizoram 318 km and Assam 262 km. Unconfirmed sources also say several mini plants dot the Bangla landscape—from Chittagong in the east, across Rangpur, Dinajpore, Nawabganj to Khulna in the west—which break the coins down to molten metal. The 4.85 gram Re 1 coin is made of ferratic stainless steel (FSS) and is costlier than the cupro-nickel variety used earlier. The illegal trade that runs the smuggling show pays a premium of 10-30% to the ground-level collectors of these coins. There are various facets about this that aren’t clear to anybody. For example, the melting part. Metallurgists say FSS requires a temperature of about 2,000 degree Celsius to melt and it is unlikely that mini plants in Bangladesh will have furnaces sophisticated enough to produce that kind of heat. Besides, they point out that after melting, FSS loses its character as iron gets separated from molybdenum and chromium. They, therefore, feel that melting isn’t a very commercially viable thing to do. Numismatist Jaidev Biswas says, “The metal is possibly used to produce cheap quality blades or artefacts or as an illegal substitute for platinum in small quantities. But there is no strong evidence of these. The standard policy is that the cost of metal in any coin is kept lower or near equal to the coin denomination, but never substantially higher than the value of the currency. Without any major value addition, therefore, usage of Re 1 coins as raw material for production of other low-cost items cannot be too profitable. However, coin smuggling is a common thing across the world.” RBI agrees. It says the total value of metal in a Re 1 coin will amount to just 70 paise when melted. RBI’s Kolkata office has already alerted the city and state police about the coins being smuggled out. “We got a tip off from RBI and my senior officers have already started investigating,” said Gyanwant Singh, deputy commissioner, detective department, Kolkata Police. RBI, in both Kolkata and Mumbai, confirmed that the demand for coins has gone up very sharply. “We have supplied 900 million coins in May alone and the four mints have a collective capacity of minting 6 million coins a day,” said the RBI spokesperson. The central bank, which manages currency and coin distribution, is using its mobile vans to carry bagfuls of coins around in large markets in metros like Mumbai and Kolkata to meet the growing demand. The coin distribution rules have also been made stricter. RBI offices now insist on trade licences and other documents before distributing coins in bulk. In Kolkata, RBI says, typical demand is for 100-125 bags of coins a day. Each bag contains 2,500 pieces. This has now gone up to about 400 bags a day. Calcutta State Transport Corporation, Calcutta Tramways and Metro Railways are some of the bulk customers for small coins. They collect about Rs 2-5 lakh worth of coins from RBI every week. |
| Posted by: John Frum 2007-06-16 06:39 |
| #5 Yup, coins are just a raw material for the recycling centers. One thing I've learned about third-world nations, the second that you can make a fraction of a cent doing something, they'll do it, no matter how destructive it is to society at large. |
| Posted by: gromky 2007-06-16 02:48 |
| #4 I blame the fuse boxes. |
| Posted by: Zenster 2007-06-16 02:37 |
| #3 A problem in several Asian countries. For years, I have got sweets (candy) as change in Indonesia. |
| Posted by: Phil_B 2007-06-16 01:47 |
| #2 ...the face value of the coins is lower than the metal value. But the shortage is still "mysterious." Who writes this stuff? |
| Posted by: PBMcL 2007-06-16 01:21 |
| #1 "No one knows exactly why there is no change in the eastern Indian city" Duh! Ever hear of "hoarding"? |
| Posted by: Barbara Skolaut 2007-06-16 00:17 |