Curious about the decline in circulation of the old Rs 5 coin in India? Discover the reasons behind this shift, including changes in minting priorities, economic factors, and public perception.
While Re 1, Rs 2, Rs 5, Rs 10, and Rs 20 coins are in circulation, the old Rs 5 coin is less common. New copper-colored Rs 5 coins are increasing. This raises the question of the old coin's validity. Let's explore the real reason behind this decline.
The older, heavier Rs 5 coins, made of cupro-nickel, weigh about 9 grams. Some are smuggled to Bangladesh, melted, and made into knives for profit.
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One Rs 5 coin can yield six knives, each selling for Rs 2, resulting in a Rs12 profit. This lucrative business fuels smuggling. The Reserve Bank of India responded by halting production of the old coin and introducing a new one.
The new Rs 5 coins are thinner, lighter, and made of a cheaper metal. This explains the decreased circulation of the old Rs 5 coin and the increased presence of the new one.
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Stopping production of the old Rs 5 coin aims to curb smuggling. This is the primary reason for the decline in its circulation.
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