Small traders’ biz goes for a toss as banks refuse to deposit coins
The priest of a prominent temple in Mirzapur recently complained to state finance minister Rajesh Agrawal that his bank was refusing to deposit the coins that the temple received as daily offerings without citing any plausible reason.
The minister asked the officer concerned to look into the matter and the problem was resolved to the priest’s satisfaction.
But not everyone is as lucky as the priest. Small traders, retailers and vendors are in a fix these days as coins are piling up in their stocks and banks – both public and private – are turning them away.
Since the banks have imposed an undeclared ban on deposit of coins in denomination of Rs 1, 2, 5 and 10, many shopkeepers, vendors and auto-drivers are not accepting coins which they are now considering as illegal tenders. Interestingly, the same banks were found forcing customers to take bags of coins when they went to change their notes or draw money during demonetisation.
“We are facing problems as banks are refusing to accept coins on one pretext or the other. Our money has been blocked which is affecting our trade,” complained president of UP Adarsh Udyog Vyapar Mandal Sanjaya Gupta.
“On Wednesday, we visited a branch of HDFC Bank on Faizabad Road to deposit coins but the bank refused to accept it without citing any reason. The officials agreed to deposit only Rs 10,000 in coins when they came to know we were traders’ leaders,” he said. Gupta even staged a demonstration at the Collectorate here on Wednesday threatening to lay siege to the regional branch of the Reserve Bank of India (RBI) here if banks did not deposit retailers’ money within a week. As confusion over the fate of coins continued, the RBI, the government and the banks have done little to clear the air.
When this correspondent mailed the queries to the RBI, Mumbai, the bank’s spokesperson Ajit Prasad sent a one-line reply saying Rs 10 coins were legal tender all across the country. He, however, remained silent on the status of coins of other denominations and also on why banks were not accepting Rs 10 and other coins if they are legal. He also did not reply to the question if the RBI had issued any advisory to banks in this regard or proposed to take action against errant banks.
“I met the RBI officials a number of times but they plead helplessness saying the RBI is merely a facilitator to the government of India that issues the coins,” said state general secretary of Laghu Udyog Bharati Ravindra Singh.
He said a number of products like toffees, match box, pencil, eraser and balloon cost between Re 1 and Rs 5.
“Producers and traders who deal in such items receive a lot of coins every day. They are very much upset. More than 150 bread manufacturing units in UP have big collection of coins because of which their working capital remains blocked,” he said.
Singh said the UP Bread Manufacturers’ Association (UPBMA) recently submitted a list of more than 50 specific complaints with the name of firms that went to deposit coins and names of the branches of banks that did not entertain them.
The Scooter India branch of the State Bank of India in Lucknow turned away Kalory Foods Pvt Ltd while the Civil Lines branch of the Andhra Bank did not entertain Shree Krishna Food Products.
We are facing problems as banks are refusing to accept coins on one pretext or the other. Our money has been blocked which is affecting our trade SANJAYA GUPTA, president of UP Adarsh Udyog Vyapar Mandal
Similarly, the Jubilee Road branch of the Punjab National Bank did not deposit the coins of Crazy Snacks Pvt Ltd and the Shastri Nagar branch of Union Bank of India in Meerut turned away Aarsh Bread and Bakery Ltd.
“No action has been taken on any of the complaints yet,” Singh rued.
The state government has taken note of the crisis caused by the banks’ refusal to accept coins.
“We took up issue with the State-level Bankers’ Committee (SLBC) on Wednesday asking them to take action against the banks if there are specific complaints that they are not accepting coins,” director, institutional finance, Shiv Singh Yadav told the HT.
He said coins were the currency of the government of India and nobody could refuse to accept it.
“Banks, in general, do not admit that they are not accepting coins from customers. Therefore, action can be taken on specific complaints only,” Yadav added.