After demonetisation, India to replace paper notes with plastic currency
Reserve Bank has been planning for long to launch plastic currency note
The Government of India is set to print plastic currency notes in place of paper ones as a safeguard against counterfeiting.
The central government on Friday informed Parliament the decision to print plastic currency and the commencement of procuring material.
Giving a written reply in Lok Sabha to a query, Minister of State for Finance Arjun Ram Meghwal said:“It has been decided to print banknotes based on plastic or polymer substrate. The process of procurement has been initiated.”
After several field trials, the Reserve Bank has been planning for long to launch plastic currency note.
Reports say plastic notes have an average life span of about five years and are cleaner than paper ones. Most importantly, the plastic notes are difficult to imitate.
The government had earlier informed Parliament that one billion plastic notes of Rs 10 denomination would be introduced in a field trial in five cities including Kochi, Mysore, Jaipur, Shimla and Bhubaneswar.
Meanwhile, the currency presses in the country stared printing new Rs 500 notes as banks across the country continued to face cash shortage, recent reports said.
The denomination of Rs 500 notes continues to be in short supply as most the cash that banks are receiving are in notes of Rs 2,000.
Sources said the RBI owned presses in Mysuru, Karnataka and Salboni , West Bengal, are expected to print around 1 billion of the new Rs 500 notes by end of the year. The RBI’s presses have been printing only Rs 2,000 notes for the past two months.
In addition, two government-owned presses at Nashik and Devas are also working on augmenting the supply of Rs 500 notes.
Before demonetization announcement, more than 1,660 crore pieces of Rs 500 notes were in circulation, in the country representing around Rs 8.3 lakh crore of total currency.
“The presses at Mysuru and Salboni will now shift focus to Rs500 notes till the pain is fairly eased by December-end. However, it will not be until January when the system will be comfortable with enough currency notes,” an official was quoted by Livemint as saying.