If you possess ₹5 coins, it is crucial to stay informed about the latest update from the Reserve Bank of India (RBI). This article provides detailed insights into the discontinuation of ₹5 coins and the reasons behind this decision.
RBI Discontinues ₹5 Coins
Currently, Indian currency in circulation includes notes from ₹1 to ₹500 and coins from ₹1 to ₹20. However, a viral news claim on social media suggested that ₹5 coins have been discontinued. The truth is that various types of ₹5 coins are still in circulation, differing in metal composition and design.
This raises an important question: why did the government and RBI decide to phase out certain ₹5 coins?
Rare Appearance of Old ₹5 Coins in the Market
Lately, thick ₹5 coins have become a rare sight in the market, while thinner, brass-made ₹5 coins are more commonly seen. The reason behind this is that the production of older, thicker ₹5 coins has ceased.
Interestingly, this decision is linked not to India but to Bangladesh. As a result, newer versions of ₹5 coins with different metal compositions have been introduced into Indian currency circulation.
The Value of ₹5 Coins and Their Misuse
The older ₹5 coins contained a substantial amount of metal, making them valuable beyond their face value. Reports indicate that these coins were being illegally smuggled into Bangladesh, where they were melted down and converted into raw materials, including iron and blood-related products.
One thick ₹5 coin could yield enough material to produce valuable goods that were sold at higher rates. This meant that the actual worth of a ₹5 coin, once melted, could be as high as ₹12, creating a profitable opportunity for smugglers.
Metal Content Determines Coin Value
The worth of a coin is determined in two ways: its face value (the numerical denomination printed on it) and its metal value (the worth of the metal used in minting it). In the case of older ₹5 coins, their metal value exceeded their face value, making them an attractive target for illegal activities.
RBI’s Step to Curb Misuse: Discontinuation of Old ₹5 Coins
As old ₹5 coins started disappearing from circulation, authorities grew suspicious. Upon investigation, it was discovered that these coins were being melted and illegally transported. In response, RBI took the significant step of discontinuing the older, thicker ₹5 coins. The new ₹5 coins now feature a different metal composition and a reduced thickness to prevent misuse.
