Minting of ₹10 Coins Reduced Due to Shortage in Raw Material

A delay in the procurement of raw materials required for coin production has compelled the Reserve Bank of India (RBI) to drastically reduce its demand for ₹10 coins, cutting the indent by half and creating concerns about a potential shortage in daily transactions. 

The RBI, which is responsible for ensuring an adequate and balanced supply of coins across the country, reviewed its denomination-wise requirement for FY19 after the India Government Mints reported their inability to secure sufficient ₹10 coin blanks within the expected timeframe. This shortage of blanks, essential discs upon which coins are struck, has been attributed to supply chain inefficiencies and delays from contracted vendors. The situation has been confirmed through official documents indicating that the delay left the mints unable to meet the original production targets.

The Security Printing & Minting Corporation of India Ltd. (SPMCIL), the governing body that operates the four major government mints located in Kolkata, Mumbai, Hyderabad, and Noida, notified the RBI in August that the procurement of blanks for both ₹5 and ₹10 denominations could not be completed on schedule. This triggered a reassessment of the production plan. As a result, SPMCIL was instructed to reduce the production of ₹10 coins from the previously approved indent of 400 crore pieces to just 200 crore pieces. This significant reduction was discussed in detail during a production planning meeting organized by the Department of Economic Affairs (DEA) on October 3, where senior RBI representatives were also present. Following the meeting, the revised indent was formally communicated to the heads of the government mints on October 4.

This alteration has the potential to disrupt RBI’s coin distribution strategy, especially because ₹10 coins have been an important part of India’s coinage system since their introduction in 2005. Being the highest-denomination coin in the country, they were expected to circulate more widely due to inflationary pressures and the rising cost of everyday transactions. The RBI had even emphasized increasing the use of ₹10 coins to reduce dependence on lower-denomination banknotes, which are more costly to print and have a shorter lifespan. However, the operational challenges faced by the mints in the previous year had already indicated systemic issues: in FY18, despite the RBI indenting 300 crore pieces of ₹10 coins, the mints were able to supply only 76 crore pieces due to logistical constraints, leading to a gradual slowdown in circulation. As of the end of March, approximately 505 crore pieces of ₹10 coins were estimated to be circulating across the country—a figure that may now fall short of market requirements.

To compensate for the reduced production of ₹10 coins, the revised plan significantly increases the output of smaller denominations, which continue to be in steady demand for everyday transactions. Accordingly, SPMCIL has directed the mints to raise the production of ₹5 coins to 113.2 crore pieces, revising the earlier target of 100 crore. Production of ₹2 coins has been increased almost fivefold, from 11.3 crore pieces to 100 crore pieces, highlighting a substantial shift in RBI’s supply strategy. Similarly, the indent for ₹1 coins has been raised from 101.9 crore to 200 crore pieces, nearly doubling the original requirement. These adjustments reflect RBI’s effort to ensure that smaller denominations remain readily accessible to the public, especially in rural and semi-urban areas where coins continue to be the preferred medium for microtransactions.

The pressure to achieve these updated targets has pushed SPMCIL and its mint units to intensify their production efforts. To meet the revised indent within the stipulated timeframe, all four government mints issued office memoranda instructing employees to extend their weekly working hours from the usual 44–48 hours to 54 hours, effective from October 6 through March 31, 2019. This extended schedule includes provisions for overtime pay and additional allowances, aiming to ensure that workers are fairly compensated for the increased workload. Despite these measures, mint officials have acknowledged the challenges of maintaining such high output levels, especially given the recurring issue of material shortages that continue to affect consistency in production.

These developments underscore the complexities involved in India’s currency management system. Coin production requires not only robust machinery and skilled manpower but also a reliable supply chain for raw materials, particularly metal blanks sourced from both domestic and international suppliers. Any disruption—whether due to delays in tendering, import complications, price fluctuations in global metal markets, or logistical constraints—can significantly impact the minting schedule. The current situation highlights the need for improved procurement planning and diversified sourcing methods to avoid similar disruptions in the future.

Moreover, the dependence on coins is still substantial in many parts of the country, particularly for vending, transport, small retail purchases, and rural markets where digital penetration remains limited. A shortage of ₹10 coins could potentially push consumers and businesses to rely more on lower denominations or resort to rounding off transactions, affecting the smooth functioning of the cash-based segments of the economy.

While the extended working hours and revised production targets aim to minimize the impact of the delays, the situation serves as a reminder of the importance of timely procurement and efficient planning within the currency supply ecosystem. As the financial year progresses, both the RBI and SPMCIL will be closely monitoring production levels to ensure that the coin supply stabilizes and that future indents can be met without further disruptions.