No Storage Space Prompts Govt to Halt Coin Production

The production of coins has come to a halt at the four government mints located in Kolkata, Mumbai, Noida, and Hyderabad.

This suspension is attributed to an oversupply in the market and a lack of available storage space. The Security Printing and Minting Corporation of India Limited (SPMCIL), overseeing the mints, issued a directive stating that the "production of circulation coins is being stopped." The notice clarified that the mints will continue their regular working hours without overtime for staff.

Reserve Bank of India (RBI) sources explain that periodic calibration of coin production is necessary based on the assessment of circulating coins and storage capacity. The Reserve Bank of India (RBI) collects coins from the mints for circulation in the market. As part of routine procedures, the RBI, as the monetary authority, reviews coin supply and usage, informing the Department of Economic Affairs (DEA), which then communicates with SPMCIL. These adjustments are temporary and conducted regularly to maintain a seamless coin supply to the public.

According to sources, without such measures, there is a risk of public resistance, leading to a refusal to accept a particular denomination if there is an excess in circulation. The decision to halt coin production has raised concerns among mint employees, as their pay is expected to be affected. Approximately 1,400 employees at the Kolkata mint protested against the move.

The suspension in minting is attributed to the aftermath of demonetization when the Government of India introduced new coins worth Rs 676 crore in denominations of Re 1, Rs 2, Rs 5, and Rs 10 to facilitate transactions among citizens. However, an oversupply of these new coins has led to storage challenges, and with the RBI ceasing pick-up operations, SPMCIL had no choice but to halt coin production.