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Monday, June 27, 2011

Reserve Bank of India withdraws 25 paise coin effective 30th June 2011

There existed host of little things which yielded big pleasure !-  salaries have increased, so also the purchasing power of the people – not to speak of the price increase and inflation.  Till a couple of decades ago, the salary day represented the most awaited day of the month – on that day morning each Office would draw cash from Bank [Insurance coverage for cash in transit drawn for wages – from the Bank premises to the Insured premises and extending to cover that unpaid cash that remained in the cashier’s till or office locker]

The smell of hard currency, especially a new note would enthuse many.  There were some who relished the salary cover taking it home and starting the month only after some offering to God out of the earned salary; there were some who started their expenses with a savings and there were some who had their covers re-written to narrate a different tale back home !!

A few decades ago, there would be make shift shops on wheel before every school compound selling host of edibles including cut pieces of mangoe to sweets [remember kammarkat !!] – all these used to cost 5, 10 and 25 paise.  Honestly, how many children or those born in the present century, would have seen those coins or handled them !!

Now, from 30th of June 2011 – coins of denomination of 25 paise (and below !!) will not be accepted as legal tender.  Yes those coins would cease to have any value !!!

The Gazette Notification no. 2529 of Dec 20,2010 notifies that ‘in exercise of the powers conferred by the sub sec 15 A of Coinage Act, 1906 the Central Govt. hereby determines to call in from circulation the denomination of 25 paise and below issued from time to time, with effect from June 30, 2011 and from this date, these coins shall cease to be a legal tender for payment as well as on account.  On Feb 1, 2011, RBI instructed all banks maintaining small coin depots to arrange for exchange of coins of denomination of 25 paise and below till close of business hours on June 30, 2011. 

This is not going to change the life of anybody and you are not going to run in panic, not knowing what to do.  May be you have some, which would total to less than Rs.20/- - just keep them with you for antique value. 

The principal currency of India is Rupee.  As is with most other countries, there is decimal currency also.  Decimal currency is the term used to describe any currency that is based on one basic unit of currency and a sub-unit which is a power of 10, most commonly 100.  Decimalisation is the process of converting an existing currency from traditional denominations to a decimal system. The logical appeal of decimalisation in general has generally been much more popular in currency than in physical measurements.  So, in India it is Rupees and naya paise.  100 paise make one Rupee !!!

History has it that India India has been one of the earliest issuers of coins in the world (circa 6th Century BC). Few countries rival India for the sheer diversity of its coinage be it minting techniques, motifs, sizes, shapes, the metals used or for.  In history, Indian coins have played a crucial role in documenting political and economic changes over time.    The Indian Coinage Act, 1906 was passed which governed the establishment of Mints as well as the coins that would be issued and the standards that would be maintained.   Acute shortage of silver on account of World War I, led the British Government to issue paper currency of One Rupee and Two and a half Rupees. The silver coins of smaller denominations were issued in cupro-nickel. The Quaternary Silver coins were issued from 1940. In 1947 these were replaced by pure Nickel coins.

After Indian Independence in 1947, the existing coinage continued but those were not the days of naya paise but of a monetary system called pies.  One Rupee consisted of 192 pies.   Those were the days of ‘annas’  -  it was equal to 1/16 of rupee – there were 1 anna, 4 anna etc.,  Four annas would be the equivalent of the modern day 25 paise – an anna would be roughly 6 and ¼ paise.  The anna system continued till 1957 when India decimalized its currency. 

‘Naalana and Ettu anna – meaning 4 annas and 8 annas representing 25 and 50 paise respectively were in vogue and I have seen those annas and still have a couple of them, though have never used them for purchase.   In the present era, the Government of India has the sole right to mint coins. The responsibility for coinage vests with the Government of India in terms of the Coinage Act, 1906 as amended from time to time. The designing and minting of coins in various denominations is also the responsibility of the Government of India. Coins are minted at the four India Government Mints at Mumbai, Alipore (Kolkata), Saifabad (Hyderabad), Cherlapally (Hyderabad) and NOIDA (UP).  The coins are issued for circulation only through the Reserve Bank in terms of the RBI Act.

The denominations in vogue included – 1 paise, 2, 3, 5, 10, 20, 25, 50 – all called small coins and Re 1, 2, 5, 10. called  'Rupee Coins'. Coins can be issued up to the denomination of Rs.1000 as per the Coinage Act, 1906.

Most Coins have become redundant long back as you literally can buy nothing with them !

Regards – S. Sampathkumar.

1 comment:

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