No Storage Space Forces Government to Halt Coin Production

The production of coins has come to a complete standstill at all four India Government Mints—Kolkata, Mumbai, Noida, and Hyderabad. This unprecedented pause stems from a significant oversupply of coins in the system, compounded by a lack of adequate storage space across mint facilities and RBI vaults.

The Security Printing and Minting Corporation of India Limited (SPMCIL), which oversees the operations of all four mints, issued an internal directive stating that the “production of circulation coins is being stopped until further notice.” While routine working hours will continue, the order explicitly mentions that no overtime will be permitted, indicating a slowdown in overall activity within the mints.

According to Reserve Bank of India (RBI) sources, such calibrations of coin production are carried out periodically to balance demand, supply, and storage capacity. Coin manufacturing is inherently dependent on the RBI’s assessment of the volume of coins already in circulation and the projected requirement. As part of the standard framework, the RBI monitors currency usage patterns and conveys its findings to the Department of Economic Affairs (DEA), which in turn issues directives to SPMCIL. These temporary halts help prevent potential issues like currency hoarding or public reluctance to accept certain denominations when there is noticeable oversupply.

The decision, however, has sparked unrest among mint employees. Nearly 1,400 workers at the Kolkata Mint staged protests, expressing concerns over the financial implications, especially since reduced operations may directly impact their earnings tied to overtime and productivity-linked incentives. Employees fear that prolonged halts could affect not only their income but also future workload stability.

Industry experts attribute the current oversupply to the aftermath of demonetization. In the years following the 2016 currency overhaul, the Government of India ramped up coin production significantly, introducing coins worth approximately ₹676 crore across denominations of ₹1, ₹2, ₹5, and ₹10 to support everyday transactions during the transition. However, as circulation normalized and digital payments surged, the demand for physical coins dropped sharply, eventually leading to storage bottlenecks.

With RBI’s coin pick-up operations temporarily suspended due to vault congestion, SPMCIL had little choice but to halt production across all mints. Although the suspension is expected to be temporary, its duration remains uncertain and will depend on how quickly existing stocks are absorbed into the market.

The situation underscores the delicate balance between minting operations, public demand, and the evolving landscape of India’s payment ecosystem—a dynamic where even a slight shift can prompt nationwide operational adjustments.