The Telegraph
Saturday , November 24 , 2012
Since 1st March, 1999
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A note that will not be there

- Durable coins to replace paper

New Delhi, Nov. 23: The 10-rupee note will be history.

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.

Junior finance minister Namo Narain Meena made the announcement in the Lok Sabha, 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.