Singapore changes its legal tender limits..

Singapore has recently streamlined its legal tender limits.

In this speech, Mr Ong Ye Kung, Minister for Education explains:

The Currency Act places legal tender limits on each coin denomination that are used for payment. The current limits are: $2 for 5-cent, 10-cent and 20-cent coins; $10 for 50-cent coins, and no limit for $1 coins. This means under the Act, a customer can use coins within these limits and legally the seller has to accept the payment.

4   Legal tender limits minimise inconvenience to vendors and their waiting customers. However, a couple of high profile news stories surfaced in 2014 where large quantities of coins, including $1 coins, were used for payment.  One case involved the payment of close to $20,000 in coins at a car dealer’s showroom. Another involved over $1,000 worth of coins at a handphone shop at Sim Lim Square.

5   Thereafter, MAS received public feedback on the need to place a legal tender limit on $1 coins. MAS agreed that it was useful to do so. 

6   We also took the opportunity to revise the basis for setting legal tender limits. The different value limits for different coins currently are confusing to many and not easy to remember. Further, instead of a value limit, we will limit the number of coins used, since the processing time and effort for coin payment depends more directly on the number of coins used, and less the total value of the coins. For example, it does not make sense to set a value limit of $2 for both 20-cent coins and 5-cent coins, which means that while a customer can use up to forty 5-cent coins, he can only use ten 20-cent coins. 

7   We conducted a public consultation exercise on the proposed revisions in 2017. There was broad support from respondents to introduce a limit for $1 coins and have a simple and uniform limit for all coin denominations that is easier to remember.

8   The Bill will therefore streamline the legal tender limits for coins to a uniform limit of 20 coins per denomination in a single payment. This means that a payer can use up to 20 pieces each of 5-cent, 10-cent, 20-cent, 50-cent and $1 coins per transaction. This is much simpler than the current legal tender limits.

9   Notwithstanding the legal tender limit, a customer and a vendor can mutually agree to transact using quantities of coins above the limit. But I am sure such instances will be infrequent, especially when more people switch to using electronic payment.

In India, the legal tender laws are:

(a) a coin of any denomination not lower than one rupee, for any sum not exceeding one thousand rupees;
(b) a half-rupee coin, for any sum not exceeding ten rupees;
(c) any other coin, for any sum not exceeding one rupee:

It means one can atmost pay Rs 1000 via coins and that too with coins of Rs 1 and higher denominations. For 10 Rs, one can pay in 50 paisa coins which means 20 coins. Smaller denominations than 50 paisa can be used for payments upto Rs 1 rupee.

Knowing all these laws is so interesting…

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