PUDUCHERRY: The Rs 10 note may soon become history, completely replaced by its coin avatar like the Re 1 and Rs 2 notes in the 1990s and the Rs 5 note more recently. The Reserve Bank of India ( RBI ) wants to replace the Rs 10 note with coins, provided there’s enough demand in market for it. The hitch: Banks are not willing to pick up Rs 10 coins, saying that customers still prefer carrying notes.“At some point, as and when the demand determines, we will withdraw the Rs 10 note just like the Rs 5 note,” said RBI governor D Subbarao. “But the trouble is banks don’t want to lift the Rs 10 coins. Banks say people prefer Rs 10 notes, so they are still in circulation . There is a shortage of capacity in the mint and the RBI’s priority is for lower denomination coins, which is what poor people use. We saw the same resistance when Re 1 notes were withdrawn in the early ’90s,” he explained.Around 11-12 billion notes and six billion coins of different denomination are minted every year. There are Rs 10 coins worth Rs 76 crore currently in circulation, but the RBI wants to shift the entire denomination to coins. “That (withdrawal of Rs 10 notes) is inevitable. Once we are able to meet the requirement with coins, we will withdraw (the notes) because we can’t have both coins and notes of the same denomination in circulation . It’s simply a question of time,” said RBI deputy governor K C Chakrabarty The RBI’s preference for coins has to do with the cost of production and life span of a note. “We prefer coins for lower denominations because notes have a much shorter life span of about nine months compared to coins and the cost of producing is much higher,” said Chakrabarty . The entire RBI top brass — including deputy governors Subir Gokarn, Anand Sinha and H R Khan — are in Puducherry for a board meeting and a state level bankers’ conference. The RBI governor further indicated that the central bank was also looking at plastic money as an alternative to paper money. “We will introduce polymer notes on a pilot basis and if the experiment succeeds we plan to mainstream it,” said Subbarao.“There was a similar effort to introduce plastic money ten years ago which did not work. But now the technology is much better and the cost of making polymer notes lower. Also, people’s attitudes have changed in the interim, so it may work this time,” he added.The RBI’s reasoning was similar when the Re 1 and Rs 2 notes made way for coins. Volume-wise , the share of such small denomination notes in the total notes in circulation was as high as nearly 60% at that time but they constituted less than 10% in terms of value. Since the average life of these notes was found to be around a year, the cost of printing and servicing them did not make economic sense. So their printing was discontinued and these denominations were shifted to coins.RBI prefers coins over notes for denominations of lower value as notes have a shorter life span of around nine months and cost more to print/replace Same reason was cited while phasing out Re 1 and Rs 2 notes in favour of coins in 1990s and, more recently, Rs 5 coin But banks are resisting the move , say notes still popular RBI guv also says the central bank plans to launch plastic notes