Varnishing Of Banknotes – Free PDF Download

IN NEWS

• In its annual report of 2018-19 released, the RBI mentioned the introduction of varnished currency notes of Rs 100 denomination on a field trial basis.
• In its 2017-18 annual report, the RBI had stated that it was exploring the feasibility of increasing the life of Indian banknotes.

WHAT IS THE ISSUE?

• Already RBI occurs expenditure on junked currency or withdrawal of old series of notes.
• With this, 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 withdrew1,636 crore pieces of soiled bank notes in 2015-16, 1,250 crore pieces in 2016-17, 2,767 crore pieces last fiscal.

 SOILED, MUTILATED AND IMPERFECT BANKNOTES

• Soiled note means a note which, has become dirty due to usage and also includes a two piece note pasted together.
•  Mutilated banknote is a banknote, of which a portion is missing or which is composed of more than two pieces.
• Imperfect banknote means any banknote, which is wholly or partially, shrunk, washed, altered or indecipherable but does not include a mutilated banknote
• The RBI said that it incurred an expenditure of ₹4,811 crore on security printing during July 1, 2018 to June 30, 2019 as compared to ₹4,912 crore in the previous year.

SO WHAT RBI IS DOING?

• The RBI is now planning to conduct a field trial of varnished currency notes to improve their durability and life.
• 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.

WHAT IS VARNISH?

• Varnish is a clear transparent hard protective finish or film.
• Varnish has little or no color and has no added pigment.
• Varnish finishes are usually glossy.

VARNISHED NOTES VS PLASTIC NOTES

• Varnished & Plastic notes, both are different.
• Plastic notes are cleaner & lighter in comparison to the paper notes.
• Plastic notes were introduced for the first time in Australia in 1988.

BENEFITS OF VARNISHED NOTES

• International experience suggests that varnishing of banknotes is expected to
• Increase their life and durability, reduce banknote replacement requirements
• Thereby, lower the overall printing expenditure,”
• The RBI said in its Annual Report 2017-18
• It also enhances the security features.

PLANS FOR CURRENCY NOTES

• The proposal to introduced varnished Rs 100 notes is part of several interesting plans the RBI has for currency notes. •
• For example, the RBI is looking at making currency notes more visually-impaired friendly.
• Also enhancing the security features of bank notes to counterfeit fake currencies.

QUALITY ASSURANCE LABORATORY

• To achieve the above objective, RBI has set up a state-of the art Banknote Quality Assurance Laboratory in Mumbai With the aim of upgrading and standardising currency notes.
• The laboratory will focus on standardising the quality of banknotes between all the different security presses that print currency notes.

PRINTING FACILITIES IN INDIA

• Section 22 of the RBI Act 1934, gives the RBI the authority to issue currency notes.
• The Reserve Bank of India has printing facilities in Dewas, Mysore, and Salboni.

COINS

• GOI directly handles the minting of coins.
• Coins are minted at the four mints:
• Alipore in Kolkata, Saifabad in Hyderabad, Cherlapally in Hyderabad, and Noida in Uttar Pradesh.
• Although the government handles minting coins, the Reserve Bank issues them for circulation.

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