Monday, August 15, 2011

Decks cleared for Rs1000/- coin. Are you ready?

Decks cleared for Rs1000/- coin. Are you ready?

The Coinage Bill 2011 was recently passed by the Upper House.
This Bill has a long history.  This Bill was introduced in 17/12/2009 in the Lok Sabha . Subsequently, it was sent to the Standing Committee and government accepted some of the recommendations on this Bill.

The Report of the Standing Committee on Finance was presented to Lok Sabha on 31/08/2010.

Subsequently, the Bill was placed before the Lok Sabha and approval of the Lok Sabha was obtained.

The major reason for the introduction of the Coinage Bill, 2011, was the need to consolidate the Acts governing currency and coins.

Department of Economic Affairs found that currency and coins are covered by five Acts. These Acts are The Metal Tokens Act,1889, The Indian Coinage Act, 1906, The Bronze Coin (Legal Tender) Act, 1918, The Currency Ordinance, 1940 and The Small Coins Act, 1971.

Four Acts out of five were passed during the colonial days. It was found that some of these Acts are to be changed. Now, Government through the Coinage Bill 2011, is replacing the above 5 Acts by a single Act.

One of the highlights of the Coinage Bill 2011, is that Coins of various denominations can be provided but not higher than Rs.1,000.  Earlier provision was up to any sum.

The user provisions, penal provisions for punishment with imprisonment up to seven years for offences relating to melting, destruction and defacing of the coins are there. This penalty has also been enhanced because it was found that the face value of the coin was less than the metal value of the coin. So, there was a tendency of collecting those types of coins and getting them melted.

However, it is to be noted that the penalty for counterfeiting Coins/Currency Notes is higher than the penalty for destruction of coins. This is because counterfeiting is a bigger crime as compared to destruction.

Mr.Pranab Mukherjee, Finance Minister has pointed that the issuance of coins of Rs1,000/- is only an enabling provision, and he did not specify when the provision would be introduced.

There are four mints in Kolkata, Hyderabad, Mumbai and NOIDA respectively, for minting coins.

Similarly, we have four currency prints for printing currency notes in Nasik, Dewas, Mysore and Salboni.