Coins below 50 paise to be scrapped from 30 June 2011
31 Dec 2010
The centre today announced that coins below 50 paise will be scrapped from 30 June 2011.
''From this date, these coins (denomination of 25 paise and below) shall cease to be a legal tender for payment as well as on account,'' the finance ministry said. It added that the minimum denomination coin acceptable for transaction from July would be 50 paise.
To simplify accounting, entries in account books for pricing of products, services and taxes, figures would be rounded off to 50 paise or a rupee from July.
The step has been taken with inflation having made small change meaningless and also because ferritic stainless steel used in making of small coins is worth more than its marked value.
Though coins below Rs1 are hardly in use in the larger cities, 50 paise, 25 paise and 10 paise coins are still in circulation in small towns and villages.
Stainless steel coins were introduced in 1988 with coins of 10, 25 and 50 paise denominations while Re1 coins were introduced in 1992.