India Sees Coin Denomination Die|
June 20, 2011
This article was originally printed in World Coin News.
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People in the United States are spoiled in regards of their currency. No matter the age of a coin or bank note, as long as it was issued by the federal government, it is still legal tender. The Trade Dollar has been the only exception to this rule. U.S. issued currency may have additional value to a collector, but the idea that even a coin or bank note that is more than a century old is still money brings a certain confidence to our financial system in the eyes of the public.
This isn’t true regarding coins and bank notes elsewhere in the world. Bank notes are often demonetized when a government or its financial system changes. Coins can sometimes retain acceptance because of their intrinsic value, rather than their legal tender value. But, a coin comprised of a base metal that is demonetized is unlikely to retain any value. This appears to be what will happen to the 25-paise coin on June 29 in India.
Reserve Bank of India Regional Director P. Vijaya Bhaskar gave the eulogy when he announced, “they shall no longer be a legal tender for payment.” The ‘they’ of which Bhaskar spoke was any coin of India with a face value of 25-paise or less.
Bhaskar was quoted in the May 5 Times of India newspaper, saying, “people can exchange the coins in banks. However, we won’t accept them if submitted after June 29. Those living in rural areas can exchange them in banks closer to villages.”
Coins in denominations of 1, 2-, 5-, 20-, 10-, and 25-paise are being demonetized. None of these denominations have been issued in the last seven to eight years. For practical purposes, the coins have such low purchasing power that they are unlikely to be missed.
The RBI is going out of its way to ensure no one who wants to dispose of these unwanted coins missed the deadline. All banks maintaining small coin deposits were advised to make arrangements to exchange these low denomination coins, with the branches of all banks being ordered to accept the coins during working hours every day through until June 29.
Banks in India are not well known for being consumer friendly regarding providing or accepting small change. Still, the central bank has also made arrangements for the soon to be demonetized coins at the counters of its own offices, further helping redeem these coins in a timely manner. While these small change coins will no longer serve as currency, according to the current edition of the MRI Bankers’ Guide to Foreign Currency, “all older [bank] notes up to 500-rupee issued by the Reserve Bank of India are legal tender.”
The MRI (Monetary Research Institute, Houston, Texas) guide identifies bank notes in denominations of 10-, 20-, 50-, 100-, 500-, and 1,000-rupee being in circulation, with the exchange rate being 44.05 rupees to the U.S. dollar. It takes 100-paise to equal one rupee, and the exchange rate is a definite indication that the 25-paise coin has little value.
The now defunct 25-paise is a stainless steel 19mm diameter coin with the reverse depicting a rhinoceros. (Yes, the rhinoceros is an endangered species.) Coins remaining in circulation include the stainless steel 50-paise and 1 rupee as well as the copper-nickel 2- and 5-rupee. Coins of higher denominations exist, but are commemoratives.
More Coin Collecting Resources:
• 2012 Standard Catalog of World Coins 2001-Date
• Subscribe to our Coin Price Guide, buy Coin Books & Coin Folders and join the NumisMaster VIP Program
• Strike It Rich with Pocket Change, 2nd Edition
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