With an aim to provide notes with longer life, the Reserve Bank of India (RBI) intends to introduce polymer notes in the country. As a measure in this direction, RBI is mulling to implement a pilot project for the new type of notes.
The advantage of polymer notes are that these notes are cleaner than paper notes, easily recyclable, provide greater security against counterfeiting and will last four times as long as conventional paper notes. “Polymer notes have been introduced in Australia and the Reserve Bank of India is examining a proposal to start a pilot project for introduction of such notes in the country”, H R Khan, executive director, RBI said.
It may be noted, Australia was the first country in the world to have a complete system of bank notes made from plastic (polymer) in 1988. Khan, who was here to release the Rs 10 bi-metallic coins on the theme of connectivity and information technology said, the timing of the pilot project has not been decided and it is likely to be announced soon.
He said, the average life of a currency note is about 6 to 9 months compared to more than 10 years for the coins. Since coins are the mainstay of various economic activities, the Central bank is promoting the use of coins. The design of the new coin has been prepared by National Institute of Design, Ahmedabad and is minted at Noida.
Stating that the proportion of currency in the broad money (M3) is about 14 to 15 percent, Khan said, it accounts for about 11 to 12 percent of the Gross Domestic Product (GDP). RBI has taken a series of measures for supplying good quality notes and to improve the security features of the currencies. Besides, Reserve Bank of India (Note Refund) Rules, 1975 is also proposed to be amended to make the system simple for the people, he added.
Khan said, the lead bank scheme is being revived and the Central bank is talking to various state governments to make the system more effective.
As part of the celebration of the platinum jubilee, the Central Bank has arranged a series of events culminating in April 2010. It plans to show a film on forged notes and supply comics to school children for promoting financial literacy and education among the people.
The new Rs 10 bi-metallic coin was released by Khan in the presence of the Orissa chief secretary Ajit Kumar Tripathy. The regional director of RBI, Kaza Sudhakar and heads of various commercial banks operating in the state were present.