Liquor shops find solutions for shortchange

Promising note is illegal, but effective when people don’t get enough change.

At a local pharmacy, instead of the few rupees you’re owed, the cashier gives you one or two candies, or a stick of chewing gum, to make up the deficit.

You buy groceries from a local general store and hate to buy chocolates as both of your children have cavities in their teeth. But the grocery employee invariably gives three to four chocolates instead of loose change.

You want those coins, the exchange doesn’t feel quite fair – and it’s bad for your teeth – but you’re reluctant to make a fuss. And so you walk out, feeling a little short-changed. If this chimes with you, then you’re not alone.

A survey conducted in 2012 by the Reserve Bank of India, found that 44 per cent of people in 12 Indian cities had the same experience; candies instead of coins for change.

Over half --56 per cent of the shopkeepers questioned in the survey-- said they found it hard to give correct change as coins weren’t easily available. Another 27 per cent said that they did not want to keep coins in stock. But 11 per cent were even more candid. For them it was too much hassle to select, count and give customers their exact change, the survey said.

But how to avoid this problem?

A very noble idea by the city’s liquor brews has raised quite a few eyebrows in the banking sectors and is sure a reason for worry. If everybody follows this “ishtyle” the RBI will have to close its shutters.

The liquor vendors in the city have created a paper currency of their own, which is as good as money in the many liquor shops of the Telangana state.

“We can’t sell candies, water sachets or éclairs for small change,” says Vasanth Goud, secretary of the Telangana Wine Dealers Association.

“We have designed redeemable promissory vouchers of small denominations. Some of the shops have gone further and have put a hologram on the vouchers to prevent counterfeit,”

Out of the 250 odd liquor shops falling under the banner of Telangana Wine Dealers Association, about 60 shop owners have joined this scheme.

Local banks are required by banking regulations to swap notes for coins. But according to some traders, this doesn’t happen.

The bank bases the amount of coins it orders on economic growth, inflation levels and the results of statistical modeling, according to an officer of RBI, Hyderabad. The RBI says it is ready to distribute as many coins as needed. RBI’s Telangana director KR Das, says that this process by liquor vendors is illegal.

Syndicate Bank CMD Sudhir Jain, says, “Central bank is authorised to issue notes. How can any vendor issue promissory notes?”

A senior RBI official who didn’t want to be named said, “Coins are supplied to 83 currency chests, the repository of money that commercial banks hold on the behalf of Reserve Bank, across the city.” This person would not spell out the amount of coins at the reserve’s small coin depots, nor what their denominations are, but did concede a problem in supply exists. The bank, he said, was recently unable to fill a request of several vendors from the wine shops.”

While the RBI has not reacted to this issue legally or through notice, the Telangana Wine Association is continuing the practice.