With demonetisation having created a major cash crunch across the country, the government on Friday informed Parliament that a decision has been taken to print plastic currency notes and for which procurement of material has started.
“It has been decided to print banknotes based on plastic or polymersubstrate. The process of procurement has been initiated,” Minister of State for finance Arjun Ram Meghwal said in a written reply in Lok Sabha to a query whether RBI proposes to print plastic currency notes in place of paperones.
RBI for long has been planning to launch plastic banknotes after field trials. In February 2014, the Government had informed Parliament that 100 crore plastic notes of Rs 10 denomination would be introduced in a field trial in five cities selected for their geographical and climatic diversity.
The selected cities were Kochi, Mysore, Jaipur, Shimla and Bhubaneswar.
Plastic notes have an average life span of about five years and are difficult to imitate. Also, currency notes made of plastic are cleaner than paper ones. Such notes were first introduced in Australia to safeguard against counterfeiting.