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Thread: Now steel coins are a precious metal in India

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    Now steel coins are a precious metal in India

    This is a duplicate post. See earlier occurrence at
    http://gold-silver.us/forum/showthre...-fiat-is-found



    http://www.dw.de/dw/article/0,,16287938,00.html

    Vanishing coins are turned into razors and ornaments


    Indian intelligence officials have cracked the mystery behind eastern India's acute coin shortage: the money is being melted down and smuggled to Bangladesh where they are turned into razor blades and ornaments.

    "At least twice, we seized sacks of Indian coins from people near the Bangladesh border in recent years. Those who were carrying them confessed that the coins were going to the other side of the border. They also said that the metals from these coins were being used to make shaving blades and shining steel ornaments in Bangladesh," Suresh Jadav, a commandant of India's Border Security Force in West Bengal, told DW.

    West Bengalpolice have confiscated bags of one-rupee, two-rupee and five-rupee coins from smugglers near the India-Bangladesh border a number of times in recent years.

    The phenomenon of vanishing Indian coins in eastern India was first reported by businessmen in 2007. The crisis continued and the West Bengal state government informed federal agencies two years later, seeking their help to stem the crisis.

    Organized gangs

    India's Revenue Intelligence [RI] department recently informed West Bengal in a confidential report that it's a fact that some organized gangs were amassing the coins in eastern India, after paying a premium of 10 to 15 percent to the ground-level collectors. The metallic contents of the coins were being used in razor and jewellery factories in Bangladesh.

    Bank notes from Bangladesh

    The ferritic steel coins were being melted into metal bars in makeshift foundries in the suburbs of Kolkata before they were smuggled across the border, the RI report said.

    A junior officer in Kolkata Police's detective department said that the police raided some suburban foundries in the past few years and found evidence that coins were being melted.

    "But because of stricter police vigilance the practice of melting coins has almost stopped in Indian territory," the police officer told DW on condition of anonymity.

    "If one is found carrying a large ferritic steel bar, he can be suspected of being a member of the coin melting gang. But if he is carrying coins and the amount is not that large, we cannot prosecute him that easily. So, now the coins are being smuggled across the border and they are being melted in foundries there, several sources have told us."

    The RI report said that Bangladeshi traders who were supplying metals to the local small-scale razor and jewellery makers targeted the Indian coins because the quality of metal in Indian coins was very high.

    Huge profits

    Zaheeruddin, a steel trader in Dhaka, told DW the rising price of steel over the past 10-15 years had made Indian ferritic steel coins - which are thicker than their Bangladeshi counterparts - worth more when they are melted down.

    "The coin melting mafia and the steel traders and also the razor and ornaments makers are making huge profits. One Indian one-rupee coin can be melted down to make four or five razor blades worth four to five takas [around 4 or 5 euro cents] each."

    A metal expert in Kolkata said that the practice of extracting metal from coins for use in industries was an old business in India.

    Businessmen and coin traders que up in front of Reserve Bank of India counter in Calcutta for collecting coins, Photo: Shaikh Azizur Rahman / DW

    "In the 1980s, nickel coins used to be melted down to make ornaments and other things. In the 1990s, smaller denomination Indian ferritic steel coins were more lucrative for melting. After 2000, when usage of smaller denomination paise coins became increasingly rare, one-, two- and five-rupee coins were targeted by the coin-melting mafia," the trader told DW. He did not want to be identified because he feared he would be investigated by the police.

    Begging from beggars

    As coins keep disappearing from the market, businesses are being badly affected. Because of the dearth of change, thousands of people and coin traders are standing in line for hours every day outside the Reserve Bank of India in Kolkata to exchange notes for coins.

    Parbati Das, who collects coins from the Reserve Bank of India daily, said that she was doing good business.

    "When I came to this business 12 years ago, I used to sell a packet of 100 one-rupee coins to the bus conductors at 102 rupees. Seven years ago the packet sold at 103 rupees. But now I am selling them at 110 rupees. The demand for coins has soared incredibly in the past five years," Das, who does her business on a pavement in central Kolkata, told DW.

    The coin crisis has even forced the businessmen to beg for change from the beggars:

    "By exchanging 90 one-rupee coins, I am getting a 100 rupee note from the hawkers. This is a very good deal for me," said Dhenu Mondal, who begs on suburban trains in Kolkata.
    Last edited by Katmandu; 6th October 2012 at 07:18 PM. Reason: Duplicate post
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    Re: Now steel coins are a precious metal in India

    Quote Originally Posted by Katmandu View Post
    ...The coin melting mafia...
    Oh, the mentality!

    (cue to Gresham rolling in grave)

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