The RBI has plans to introduce varnished currency notes on a field trial basis to increase the durability of notes. An annual report was released recently stating that many countries like Kenya have applied the concept of varnishing banknotes to increase the life of banknotes. This has in turn reduced replacement and security printing costs. The RBI is in talks with the Government of India to introduce varnished banknotes on a field trial basis.
After the banknotes are printed, a dirt-resistant varnish is applied to them. But, this might add to printing costs. The RBI had also introduced plastic currency on field trials to achieve the same objectives.
As per reports, 4,912 crore rupees has been spent on printing new notes from July 2017 to June 2018. The RBI has to replace soiled notes apart from demonetized ones. Soiled banknotes worth 1,636 crores were withdrawn in 2015-16, 1,250 crores in 2016-17, and 2,767 crores in 2017-18.
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