RBI to launch polymer currency notes officially in 2015

AK Ramdas 26 May 2014

The launch of polymer currency notes by RBI would be the beginning of the end of fake Indian currency notes entering from Pakistan and other neighbouring countries

While speaking to the press recently, Dr Raghuram Rajan, governor, Reserve Bank of India (RBI), stated that RBI has plans to officially launch plastic notes in 2015, after field trials are carried out in Bhubaneswar, Jaipur, Cochin, Mysore and Shimla.

This confirmation is assuring, considering the spate of increase in the fake Indian currency notes in circulation. It may be recalled that, in the past, these were generally found to be in Rs500 and Rs1,000 denomination, but, recently, such fake currency notes have been found to be in lower denominations too, starting at Rs10 to Rs100, in Bengaluru. Also, in the same metropolitan city, bundles of fake currencies were unearthed inside a prison!

Anyway, let's take a look at the chosen cities, for climatic and geographic reasons. According to the 2011 census, the population data for these cities were:

Tender bids have come out for issuance of one billion notes. Pilot testing will be done in these selected sites, and based on these tests, the polymer or plastic notes will be launched. These will be issued in Rs10 denomination and field trials carried for geographical and climatic diversities.

Though the press reports say that plastic notes have an average life span of five years and are difficult to imitate, in actual experience, they are in circulation, and in good condition, for several years more. In fact, even in the case of current paper currency in circulation, Rs10 notes minted even before 2007 are in circulation, though they look dirty.

These one billion plastic notes will literally disappear in no time, particularly when announcements are made to this effect and the purpose may not be served at all. It is to assumed that these plastic notes will be in different from the current Rs10 notes in circulation in many or most respects, including the picture and other details. The other points that come to the writer's mind relate to the assured availability of the required type of polymer sheets in adequate quantities and constant availability. In fact, India must obtain not only the raw material source (if it is not indigenous)

but also the technology and expertise to mint these in several principal cities, so that, when launched, the polymer notes are in all denominations, simultaneously.

A time frame also needs to be set up so as to mop up the old currency notes so that changeover is swift and complete. Already, more than 25 countries, with Australia as the pioneer, are already using these polymer notes with success. The new government, no doubt, will give all the support RBI needs to ensure that this launch is the beginning of the end of fake Indian currencies from Pakistan.

(AK Ramdas has worked with the Engineering Export Promotion Council of the ministry of commerce. He was also associated with various committees of the Council. His international career took him to places like Beirut, Kuwait and Dubai at a time when these were small trading outposts; and later to the US.)

Comments

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Dr Anantha K Ramdas

1 decade ago

In response to Mr Suchindranath Aiyer, all I can say is that, so far, Australia, the pioneer in polymer currency notes, has not been able to to find counterfeit currency coming in. They are at it for the last 25 years.

Encouraged by their success, so many others have followed and next year, coincidentally, the UK will also introduce GPB 20 notes in polymer, as they are really long lasting, not easily fakeable, and much easier to handle than paper/cotton based currency notes. Our Rupee has cotton element too in the paper mix used!

I have not seen the full details of the Nawaz Sharif and Narendra Modi 5 point discussion; it is hoped that fake currency emnating from Pakistan was one of the issues! This must be stopped at all cost, as otherwise, it will ruin our economy built with so much effort.