Government to conduct trial of plastic currency
21 July 2012
The Reserve Bank of India (RBI) is conducting trials on plastic and polymer-based notes in a bid to extend life of banknotes and cut the cost of their production and disposal, according to a report.
RBI is exploring the possibility of introducing plastic notes in the country and the trial of 1 billion notes would be conducted across five places, including Mysore, Kochi, Shimla, Jaipur and Bhubaneshwar, according to the report.
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 will be in denomination of Rs10 and further decision to introduce it or not will depend on the outcome of the field trial,'' the RBI explained in reply to an RTI application filed by RTI activist Subhash Agarwal on the status of introduction of plastic notes in the country.
Currently, the Rs2 and Rs5 denomination notes in circulation number 11,540 million, Rs1,000 - 4774 million, Rs500 - 10,934 million and Rs500 14,119 million.
The average cost of printing notes of each denomination differs, with printing a Rs500 note costing Rs3.58 and the printing cost increasing for a Rs1,000 note - currently at Rs4.06.
A Right to Information reply by the Reserve Bank of India has revealed that it cost 50 paise for printing a currency note of Rs5 denomination, Re1 (0.96 paise) for Rs10 and Rs1.50 for a Rs20 note. However, the print cost of a Rs50 note (Rs1.81) was higher than that of a Rs100 note, which costs Rs1.79, according to Business Line.
The RTI also revealed that small denomination bank notes had a lower average life than bank notes in higher denomination (Rs100, Rs500, Rs1,000).