India to issue plastic Rs10 notes soon on trial basis

Plastic notes in the denomination of Rs10 will be introduced within this year on a pilot basis in five cities selected for their geographical diversity, minister of state for finance Namo Narayan Meena told to the Lok Sabha on Friday.

In a written reply, Meena said about 100 crore of Rs10 plastic notes would be issued on a trial basis in Kochi, Mysore, Jaipur, Shimla and Bhubaneswar.

The places have been selected on the basis of their varied geographical location and climatic conditions and the induction of plastic notes will depend on the results of the trial.

The field trial is expected to be launched in the second half of 2014.

Plastic notes have several advantages, including a much longer life span than paper notes, difficulty in counterfeiting, and cleanliness (they are washable).

The polymer currencies would have an average life span of five years against one year for paper currencies.

Such notes were first introduced in Australia to safeguard against counterfeit currency. These are now in use across a number of other countries, including Singapore, Canada, New Zealand, Malaysia, Vietnam, Fiji, Brunei, Papua New Guinea and Romania.

In response to an RTI application in July 2012, the RBI had said, small denomination bank notes had a lower average life than bank notes in higher denomination (Rs100, Rs500, Rs1,000.

In January this year the apex bank announced plans to withdraw from circulation all currency notes issued prior to 2005, after 31 March 2014, after which, these notes can be exchanged at banks for newer ones (See:RBI to phase out currency notes issued prior to 2005 from 31 March).