In its annual report for FY 2018-19 released today, the Reserve Bank of India (RBI) announced that it is planning to introduce varnished currency notes of Rs. 100 denomination, on a field-trial basis.
The move is aimed at testing the life of these banknotes. The RBI believes varnished notes have a better lifespan.
Here are more details.
Varnishing to increase currency notes' life and durability: RBI
"International experience suggests that varnishing of banknotes is expected to increase their life and durability, reduce banknote replacement requirements and thereby lower the overall security printing expenditure," said the Central bank.
Circulation of banknotes increased in both value and volume
Giving figures about the circulation of banknotes, the RBI said that the value and volume of banknotes increased by 17% and 6.2%, to Rs. 21.1 lakh crore and 10,875.9 crore pieces, respectively, during 2018-19.
However, the volume of smaller denomination notes, viz. that of Rs. 10 and Rs. 100 stood at 47.2% by March-end 2019 as against 51.6% at the same time in 2018.
Security printing costs reduced, compared to previous year
Further, the RBI stated that it incurred an expenditure of Rs. 4,811 crore on security printing during July 1, 2018 to June 30, 2019 period, as compared to an expenditure of Rs. 4,912 crore in the previous year.
Circulation value of Rs. 500 banknote witnessed a sharp increase
In terms of value, the share of Rs. 500 and Rs. 2,000 currency notes accounted for 80.2% of the total value of banknotes in circulation by March-end, 2018.
This hiked up to 82.2% by end of March, 2019.
Notably, the circulation (in terms of value) of Rs. 500 banknote witnessed a sharp increase in value, from 42.9% to 51%, over the past year.
RBI to develop mechanism for visually-impaired for identification of banknotes
Last but not the least, the RBI in its report said that "Aiding Visually Impaired in Identification of Denomination of Banknote" is one of its agendas for the upcoming financial year, ie. 2019-20.
Under the plan, the Central bank is looking to develop a mechanism/device for helping the visually impaired in easily identifying the denomination of all banknotes.