We’ve all seen those shiny brass five-rupee coins and the heavier ones that used to be more prominent. But of course, in recent times, there are fewer of the heavy ones. There’s murmuring that the five-rupee coin is actually being phased out. Now, let’s dig into what really is going on.
Two kinds, one end
So, India has two versions of five-rupee coins. The Brass Coin: This is probably the coin you see most often around you. The Heavier Coin: These coins were once abundant but are now getting scarce, as they are made from a denser metal.
Why the Decline
The main reason for the decline of the heavier five-rupee coin lies in simple economics. The metal used to make these coins is valuable. It can be used to create four to five blades, which can be sold for more than the coin’s face value of five rupees.
Cost-Benefit Analysis: The policy of the government and Reserve Bank of India is: if the cost of production of a coin is higher than its face value then it might be withdrawn from circulation. Think of it this way: If someone melts down a five-rupee coin and uses the metal to make five blades, selling each blade for even just two rupees, they’d make ten rupees. That’s more than the coin’s original value! This economic reality has probably played a role in the decision to stop making the heavier coins.
Will the Five-Rupee Coin Disappear Altogether
That is to say, this does not mean the five-rupee coin is going to disappear entirely. The brass five-rupee coins will be in production and circulation. Authority of RBI Do recall: the RBI alone can decide which coins and which banknotes should go into print and circulation in India. Careful consideration of various economic factors as well as those that involve public convenience informs all these decisions. For the most accurate and up-to-date information on any changes to Indian currency, it’s always best to rely on official sources like the Reserve Bank of India’s website or official government announcements.
Disclaimer: This article is for informational purposes only and should not be considered financial advice.
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