The RBI plans to gradually replace the notes with coins
because the paper currency lasts less than a year and is, therefore, not
cost-effective.
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| replacement time |
Junior finance minister Namo Narain Meena made the
announcement in the Lok Sabha recently, saying the notes had a life span of
“just eight to nine months”. Officials said the main reason was high wear and
tear resulting from their widespread use in small-value daily transactions.
“RBI plans to gradually replace Rs 10 bank notes with coins,”
Meena said in his written reply. Its average printing cost is 96 paise per
piece. Based on the calculations, officials said the government spent Rs 10
over seven to eight years to keep a 10-rupee note in the market.
The cost of minting a 10-rupee coin — introduced in March
2009 — is higher at Rs 6.10 but it lasts decades.
“Considering the short life-span, the printing of the note is
not cost-effective,” Meena said. He added the speed of the replacement would
depend on the capacity of mints to supply coins.
The Centre is experimenting with polymer and plastic notes in
lower denominations to see if they were more durable. The measure was initially
meant to check fake currency.
The RBI said separately it would soon issue more notes with
the new rupee symbol — Devnagari “R” slashed in the middle with a short line.
