RBI All Set To Launch Plastic Currency Notes Next Year


BANGALORE: The Reserve Bank of India is organizing to launch plastic money notes next year on a pilot basis. This new move is to strengthen protection functions to reduce the efforts of forgers. This also aims to put together a national invoice settlements system that could possibly take and eliminate middlemen in performances, reports Times of India.

"The Reserve Bank of India is also looking at other alternatives for improving the life of bank notes,'' the central bank said in its annual report for 2013-14. The central bank floated a tender for plastic currency notes in January after years of deliberation. Depending on the trial, the notes should be introduced widely next year.

"Plastic notes are coming... Tender bids have come for 1 billion notes. In five cities, pilot testing would be done, including Shimla," RBI governor Raghuram Rajan said in May after a board meeting in Shimla. "In 2015, it would be launched based on the results of pilot testing."

Plastic notes are known to have an average life span of about five years and are also difficult to duplicate. Also, the plastic currency notes are cleaner than paper notes and also stain proof and don't tear easily. Plastic notes were first introduced in Australia to safeguard against counterfeiting of currency. There are several countries in the West that have introduced plastic notes for their advantage over normal notes.

The plastic notes are expected to be introduced in Kochi, Mysore, Jaipur, Bhubaneswar and Shimla - centres with different weather conditions. Notes of low denomination like 10 Rupees notes will be used in the pilot project.

To further the cause of financial inclusion and protect consumers, the central bank is also planning to review Know Your Customer norms without weakening anti-money laundering requirements. It will also review priority sector guidelines, according to changing economic priorities.

In order to make payment mechanisms more efficient, the central bank is also planning to combine systems which offer similar services or cater to the requirements of same market segments.