Mumbai traders mint coins to beat shortage

Fed up by the constant shortage and increasing black-marketing of coins, wholesale traders in South Mumbai have minted their own coins and are using them as currency. So far 50,000 coins of Re1 and Rs2 denominations have been minted and are being distributed in the wholesale markets in Bhendi Bazaar and Masjid Bunder.

The coins, made by the Mandvi-Koliwad association, were put in circulation in the first week of January. “A metal cast was made for one rupee and two rupee coins. Coins worth Rs50,000 have been made in the first batch; more will be made depending on the response,” said Dinesh Shah, a grocery store owner and member of the association.

“We had no other option. For the past one year, shortage of coins has troubled us. Earlier, coins were easily available through the Reserve Bank of India outlet, but that too has stopped now.”

Rampant black-marketing, because of the shortage, is another troubling aspect. “The situation is so bad that we have to pay a heavy premium on the coins,” said Abdul Sattar, a bakery owner.

For one rupee coins worth Rs100 one has to pay Rs114, while for two rupee coins worth Rs100 one has to pay Rs115. For five rupee coins worth Rs100 one has to pay Rs118. “These rates keep changing. During festivals, the premium goes as high as Rs125 for coins worth Rs100,” said a trader.

So far, the coins have been put into circulation in the wholesale market area of Masjid Bunder and Bhendi Bazaar. “Right now, only regular traders are using the coins so that the circulation remains within the market,” said another trader.