Dalal Street Investments

Currency Coin Scam Hits India.

June 7, 2007

You must have always noticed that whenever the Congress Government is in power, Indians have to face the wrath of a Financial Scam. Be it the Bofors Scam or the 1994 – Securities Scam or 2005 – SEZ Land Scam.

To your left you can see a Rs 2 coin made of Cupro-Nickel which weighs 6 gram and is 26 mm in diameter. Scamsters have been collecting coins of Rs 2 denomination and smuggling out of the country, mainly to Bangladesh where they are melted and re-minted to form statues and other metal articles. Why only coins of Rs 2 denomination ?

Because you get 6 gram of Cupro-Nickel. While in coins of Rs 5, the weight is only 9 gram, proportionately it should have been 15 gram but they aren’t because the coins of Rs 5 came into circulation when the prices of Cupro-Nickel had already appreciated and thus they have just 9 gram of Cupro-Nickel.

It is the duty of the Central Government of India to protect its currency. Instead the Government has asked RBI to pump 900 Million fresh pieces of coins in May-2007. I overheard some folks talking that for every Rs 100 of these Cupro-Nickel coins, their is a kingpin who is paying Rs 160 in Cash. Imagine the depth of the racket and our government doing nothing.

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