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Lack of storage space prompts govt to halt coin production

Press Trust of India  |  Kolkata/Mumbai 

The four mints in Kolkata, Mumbai, and have stopped production of coins owing to a glut in the market and lack of storage space, sources said today.

State-run Security Printing and of Limited (SPMCIL), which runs the mints, had in a directive yesterday said the "production of circulation coins is being stopped with immediate effect".

The notice added that the mints will continue to function during normal working hours "without any overtime for staff".

RBI sources said the calibration of coin production needs to take place from time to time based on an assessment of the coins in circulation and storage space. Right now, there is no space with banks or the RBI to store the coins.

The Reserve of (RBI) picks up the coins from the mints for circulation in the market.

The banks have run out of storage space mainly because of the junked banknotes deposited with them following in November 2016.

As the monetary authority, the RBI reviews the supply and usage of coins on a regular basis and informs the (DEA), which then communicates with SPMCIL.

The RBI sources added that these are temporary exercises and are undertaken regularly in order to ensure smooth supply of coins to the public.

"If such an exercise is not undertaken, there can be a backlash or push-back from the public, wherein it will stop accepting that denomination of coin of which there is an excess," a source said.

The SPMCIL notice also said that as on January 8, 2018, there was an inventory of 2,528 million pieces of circulation coins lying in the mints.

The decision to halt coin production has not got down well with employees of mints as their pay is likely to get affected following the move.

There are around 1,400 employees at the mint who agitated during the day condemning the move.

(This story has not been edited by Business Standard staff and is auto-generated from a syndicated feed.)

First Published: Wed, January 10 2018. 22:25 IST