June 11, 2013 – The Reserve Bank of India (RBI) is pushing since a long time to phase out banknotes in favour of coins due to economic reasons. According to RBI deputy governor K. C. Chakrabarty at least for the lower denominations coins are clearly preferable ‘because notes have a much shorter life span of about 9 months compared to coins and the cost of producing is much higher.’
However, it has become clear that the mint capacities cannot keep up with the requirements to phase out the Rp 10 notes replacing them by coins. According to a Times of India report Mr Chakrabarty stated recently ‘We are looking at alternatives on how to increase mint capacity because only when they say they can improve capacity will we start phasing out lower denomination notes including the Rs 10 note.’
You can read the whole article on Times of India.
About the RBI’s plans of phasing out the Rp 10 banknotes we reported some months ago here.