The E-Sylum:  Volume 10, Number 28, July 15, 2007, Article 24

COIN POLICE ACTIVE IN INDIA

Dick Johnson writes: "'In India, where the steel in their rupees
can be sold for up to 35 times that [face] amount, India's has
deployed a paramilitary force along their border with Bangladesh
to prevent coin smuggling. Like most governments, India also makes
it illegal to introduce substitute currency.' So comes the news
from India, reported this week in the blog "Hodakvalue," on the
Internet.

"Rising costs of the metals in coins is affecting nations worldwide.
Apparently the most rampant coin melting for their composite metal
value is in Bangladesh. Next-door neighbor India is vulnerable. The
same report gives some comments about the stringent coin situations
in India:

"'In Calcutta alone, India's central bank - the Reserve Bank of
India - has distributed coins worth nearly six million rupees
($150,000) to overcome the shortage in the last two weeks, bank
treasurer Nilanjan Saha said.'

"'Long queues form outside the bank's regional office in the
city centre every time this happens.'

"'Unscrupulous touts set up makeshift shops and collect as many
of the coins as they can, only to sell them later at a premium.'

"Nations don't seem to realize that rationing coin distribution
-- or hiding from the situation -- won't solve the problem. It
won't go away and the cost of the metals are surely going to rise.

"The solution is to eliminate small denomination coins, strike
coins of higher denomination and round off transaction prices above
the value of those low-denomination coins. This is necessary for
large and small countries as well. The longer they wait, Treasury
officials will find even greater problems.

"Here's the report from India "Preventing the flight of pennies
with armed  border guards":
Full Story

  Wayne Homren, Editor

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