Home ›› 13 Dec 2021 ›› Front
The use of metal coins – once considered essential for day-to-day transactions – is diminishing due to the reluctance of banks, businesses and consumers, indicated by a large coin stockpile currently in possession of the central bank which should be in circulation.
Latest Bangladesh Bank data shows that its branches had a stock of around Tk 481 crore in coins till November 23, while Tk 697 crore in coins were in circulation. Of those, Tk 215.31 crore is in Tk 1 coins, Tk 179.39 crore in Tk 2 coins, and Tk 302.33 crore in Tk 5 coins are in circulation.
In comparison, Tk 584.77 crore in coins were circulating in the same month last year. These figures show that coin circulation in the country has dropped by Tk 112.30 crore within just a year.
Regulator sources say most banks are no longer accepting coins, while a number of commercial banks claim that their customers are refusing to accept loose change.
Consumers on the other hand are saying that retail shops are downright rejecting payment in coins. Some businesses are also trying to pass off candies instead of paying their customers back with coins and smaller notes, citing a shortage of coins as their reason.
The Bangladesh Bank data however clearly shows that this so-called shortage is artificial. Insiders further said a number of companies now have crores of Taka in coins, but they have been unable to utilise those in transactions.
‘Loose change still necessary’
Commenting on the issue, former governor of Bangladesh Bank Dr Salehuddin Ahmed said, “Though the value of loose change has dropped, those are still necessary. Coins are used to attain a number of goods and services in various countries, such as for operating laundromat machines and buying train tickets.
“If we want to boost the use of coins in Bangladesh, we have to introduce more of such automatic machines.”
He continued, “Coins last longer that notes. So, aside from banks, the people should also boost the use of coins in good faith. The central bank must take action against banks that are refusing to accept coins.”
Traders taking advantage
In a spot visit to different shops across the capital city, The Business Post found shopkeepers handing over cheap candy to their customers as a replacement for loose change, citing artificial shortage of Tk 1 coins.
The Bangladesh Bank is yet to take any measures centring this long-standing issue.
Mehedi, a shopper visiting the Karwan Bazar, said, “A certain quarter of businessmen are making good money using the excuse of Tk 1 coin shortage. Whenever these traders owe us loose change, they shortchange us by giving candies.
“Many customers also refuse to take candies, which too is profitable for the traders. Almost all businesses, especially grocery traders and flexi-load shops, are using this excuse to shortchange their customers.”
Homemaker Yasmin Islam, who was shopping at the capital’s Kaptan Bazar, said, “The traders are using the excuse of Tk 1 coin shortage as a business tactic. Aside from making profits through sales, they are overcharging their customers citing a lack of loose change.
“Most of the time, traders are handing over candies worth 50 paisa instead of Tk 1 or Tk 2 coins. Through this malpractice, at least several lakh people are being cheated on a daily basis. The government should either withdraw Tk 1 from the market, or ensure ample supply.”
Addressing the matter, a number of retailers said there is nothing in the market that can be bought with Tk 1 or Tk 2 coins, except candies and matches, and this is why the demand for these coins are plummeting.
‘Consumer goodwill a must’
Former chairman of Association of Bankers, Bangladesh and Mutual Trust Bank’s Managing Director Syed Mahbubur Rahman said, “When withdrawing money, our customers not only just refuse to accept coins, but Tk 10 or Tk 20 notes as well.
“Even our smaller customers like to withdraw sums in larger notes. Maybe this is why banks are not accepting coins from the central bank as they used to.”
He added that aside from the banks’ cooperation, consumer goodwill in accepting coins is a must to help boost their declining transactions.
Addressing the so-called shortage, Bangladesh Bank’s Executive Director and spokesperson Serajul Islam said, “There is no shortage of coins in the market, and the banks have adequate number of the loose change too.
“A certain quarter of dishonest traders have formed a syndicate to establish the notion of a coin shortage, and many people are unwittingly aiding the ploy.”
He continued, “The banks will have to take initiatives to alleviate this crisis. They will have to boost the transaction of coins. Every bank should install a coin exchange desk in each branch to resolve issues regarding loose change transactions.”
A senior official at the central bank, on condition of anonymity, told The Business Post, “Every bank is bound to accept and disburse all existing coins. The use of loose change is still common in many government procedures, and the central bank never stopped their supply.
“However, most of the banks are showing disinterest in coin transactions.
A conglomerate has been facing trouble transacting their loose change of nearly Tk 10 crore. We are actually forcing the banks now-a-days to accept coins.”
AB Mirza Azizul Islam, adviser to the former caretaker government, said Tk 1 and Tk 2 notes and coins are a small part of Bangladesh’s overall economy, and the diminishing use of the loose change will not make a serious impact on the country.
“Inflation might be causing the diminishing transactions of Tk 1 and Tk 2 in loose change,” he said.
