It is not long ago when coins of various denominations came in very handy with day-to-day financial transactions alongside currency notes, but nowadays the metallic money with smaller values have ceased to function.
The lack of policy support by the central bank and its failure to control transactions using coins are attributed to the cause of their disappearance from the retail markets.
Sources said instead of facilitating smaller transactions, they have ended up in the Bangladesh Bank vault, thus leading to crisis in the retail transactions by end users.
Banking sources said except in some departmental stores or shopping malls, coins are not of much use in the market and those who save coins out of their interest also replace them with paper notes in the course of time.
A source in the central bank said it has an accumulation of coins worth Tk500 crore of different values, including 1 paisa, 5 paisa, 10 paisa, 25 paisa and 50 paisa, Tk1, Tk2 and Tk5.
Of the smallest denominations of currency, 1 paisa, 5 paisa, 10 paisa, 25 paisa and 50 paisa have lost their uses in the market, with Tk1, Tk2 and Tk5 remaining idle in the vault despite their necessity in the field of transactions.
As the central bank's vaults are almost overstocked with huge coins, it has directed banks to accept coins according to limits fixed on the basis of their branch sizes. The limit starts from Tk5,000 to Tk30,000 depending on branch sizes.
Cashing in on the limit, some vested interests are collecting coins from the market and pouring them into the central bank’s stock.
On the other hand, businesses alleged that different branches of scheduled banks across Bangladesh refused to accept coins from them.
A Narsingdi Bakery owner Abul Khair told the Dhaka Tribune that he has around Tk13 lakh in the form of coins but the banks in his area are reluctant to take them.
“I am now at a loss, since the banks are not taking the coins from me. I am running my business on bank loan. What shall I do if the banks do not accept coins?” Khair posed a question.
According to the central bank directive, individual banks are bound to accept coins valued at Tk1,000 from a person daily.
It is noticed that the banks are disinterested in taking coins due to counting difficulty, thus disregarding the central bank’s instruction.
Contacted, Bangladesh Bank Executive Director Subhankar Saha, also the spokesperson of the bank, told the Dhaka Tribune that all the authorised banks have to comply with the directive issued by the Bangladesh Bank and stern actions will be taken against those who fail to do so.
Almost all countries in the world have made their coins an integral part of daily transactions and they do not have same currency notes alongside coins, but Bangladesh has both.
Bangladesh Bank officials said except in some South Asian countries, nowhere in the world, coins and currencies of same denominations coexist.
They cited India, Nepal and Bhutan having some currencies of same denominations alongside coins, but supply of those currency notes are few and far between.
A source in the Ministry of Finance (MoF) said a cohort of the ministry officials pursue their high-ups to direct the central bank for printing currency notes of same denominations as coins to satisfy their self-interests.
The central bank is often subjected to the pressure or influence of MoF, added the source.
According to Bangladesh Bank, coins last at least 40 years, but notes depend on their uses. Sometimes, many notes turn unusable within a few months of printing.
Experts said circulation of coins in the market is necessary to reduce dependence on paper notes whose printing is costlier than minting coins.
Analysts say availability of both coins and paper notes of same denominations has encouraged people to opt for notes rather than coins during transactions to avoid weight in purses or wallets.
Besides, they said there is an absence of options like vending machines and buying electronic tickets for buses or trains where people are to be compelled to use coins helping circulation of lower denomination currencies in the market.
Dr Salehuddin Ahmed, former governor of Bangladesh Bank, said the central bank has failed to execute its existing policy on the use of coins. Not only this, Bangladesh Bank has also been unable to take up proper strategy to circulate coins in the market.
“A certain amount of coin transaction has to be made compulsory in retail transactions so that people feel encouraged to exchange coins in their daily business activities.”
The former governor also suggested not circulating same denominations of coin and currency in the market.
Asked about putting an end to printing and minting currency notes and coins of same value, Bangladesh Bank spokesperson Subhankar Saha told the Dhaka Tribune: “We will decide on it after our policy review in this regard.”