It’s not just wooden furniture that does well with a coat of varnish.
The Reserve Bank of India is now planning to conduct a field trial of varnished currency notes to improve their durability and life.
“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,” the RBI said in its Annual Report 2017-18, which was released on Wednesday.
Now, in consultation with the Government of India, the Reserve Bank of India has been exploring the feasibility of increasing the life of Indian banknotes. “It is proposed to introduce varnished banknotes on a field trial basis,” it said.
Internationally, varnishing of banknotes is being done by a number of countries such as Kenya, while many others are exploring it as an option. In such cases, a dirt-resistant varnish is applied to the bank note after it is printed. Varnishing will, however, add to printing costs.
Earlier, the RBI was also working on field trials of plastic currency notes as it tries to look at ways to improve the life of banknotes and cut down printing costs.
Between July 2017 to June 2018, the central bank spent ₹4,912 crore on security printing of currency notes, according to the annual report.
Apart from junked currency or withdrawal of old series of notes, soiled currency notes is a big issue for the RBI.
It disposes of crores of soiled banknotes every year, which must then be replaced with new notes.
According to the report, the RBI withdrew 1,636 crore pieces of soiled bank notes in 2015-16, 1,250 crore pieces in 2016-17, and 2,767 crore pieces last fiscal.