Banking News

Banks cannot decline to accept the coins minted by the Government

Banks cannot decline to accept the coins minted by the Government

In a rejoinder to widely spread Social media rumours about RBI’s declaration of ₹ 10 coins as invalid, the central bank vide its press release no.RBI/2016-2017/1257 dated Nov 20, 2016, advised members of the public not to give credence to such ill-informed notions as well as ignore them and continue to accept these coins as legal tender in all their transactions without any hesitation. Further, setting rest the rumours of ₹ 10 coins were banned; the regulator warned that “those who refuse to accept the coins could face the legal action”.

As far as banks are concerned, all the public sector and private sector banks are asked to accept coins of all denominations in circulation from any member of the public without any restrictions and pay the values in notes. Banks were also asked to use coin counting machines or accept coins by weight in order to be able to accept large quantities of coins tendered at the bank counters provided the coins are tendered after sorting out. Actually, the coin counting machines installed by the RBI and other commercial banks sort the coins, prints out a total and any damaged or foreign coins will be cast aside by the machine.

Clarification on same denomination coins in different designs

RBI press report quoted that ‘some less-informed or uninformed persons who suspect the genuineness of such coins  (eg:10 Rupees coins in two designs ) are creating doubts in the minds of ordinary people including traders, shopkeepers, etc., impeding the circulation of these coins in certain pockets of the country causing avoidable confusion’. The Apex Bank clarified that the same denomination coins are minted by the Government from time to time with little variation in designs and even shapes. Since coins remain in circulation for longer periods, it is quite possible that coins of different features for the same denomination are circulated at the same time.  For instance, the new Rs.10 coin contains the rupee symbol  ‘₹’, whereas Rs.10 coin issued six years back was without rupee symbol’ ₹’. However, both of them are legal tender and equally good for transactions, though they may look a little different.

Management of coins 

The coins as legal tender are minted at four government mints in Mumbai, Kolkata, Noida and Saifabad/ Cherlapally in Hyderabad. The responsibility for coinage vests with Government of India on the basis of the Coinage Act, 2011. The designing and minting of coins in various denominations are also attended to by the Government of India.  The Reserve Bank of India puts into the circulation of coins produced by above mints. In addition to arrangements for the exchange of coins at the counters of Reserve Bank, over 4280 currency chests of commercial banks also store the coins on behalf of RBI and distribute the coins to link bank branches and the public.

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