Illegal smuggling to Bangladesh is the reason why the Reserve Bank has scrapped the old Rs 5 coin. These old 5 rupee coins are made of metals. That too, these coins contain large amounts of metal. So smugglers export these coins to Bangladesh. This has significantly reduced the circulation of currency in our country. In Bangladesh, these coins are melted down and shaped like razor blades. Knowing that 6 blades can be made with this single coin
Many may be surprised. Moreover, they can be bought for Rs.2 each.
When the government came to know about this, they changed the shape of the coin and the composition of the metal. The Reserve Bank of India has made the five rupee coins thinner than the previous edition. At present RBI is producing Rs 5 coin at low cost. Also, the central bank has linked some of the cheapest elements in the market to the metal. Thus making it impossible for the smuggler to manufacture razor blades even if Rs 5 coins were exported.
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The surface value and metal value of a coin are different. In other words, one coin is worth two. The face value of a coin determines its value when exchanged. For example, the face value of a 5 rupee coin is 5. On the other hand, the price of the metal used in the manufacture of a coin determines its metal value. The metal value changes with the change in the market value of the metal used for production. Thus the metal value of an old 5 rupee coin when melted is higher than its surface value. In short, smugglers have taken advantage of its metallic value.
The metal value changes with the change in the market value of the metal used for production. Thus the metal value of the old 5 rupee coin when melted was higher than its surface value. Smugglers and thieves took advantage of its metal value.
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