The government has decided to conduct a field trial with one billion plastic/polymer bank notes to check the possibility of introducing plastic notes in India.
The trials will be conducted in five places, including Mysore, Kochi, Shimla, Jaipur and Bhubaneshwar. According to an RTI reply, the places have been selected on the basis of their varied geographical location and climatic conditions and its intduction will depend on the results of the trial.
“The field trial will be in denomination of `10 and further decision to introduce it or not will depend on the outcome of the field trial,” the RGI has explained in their reply to an RTI application filed by RTI activist Subhash Agarwal on the status of introduction of plastic notes in the country.
The RGI says that the proposal of introducing plastic notes was taken in order to elongate the life of bank notes, “particular the lower denominations, so to cut down the production and disposal costs it was decided by the government of India and Reserve Bank of India to initiate steps to conduct field trials,” added the RTI.
According to the RTI, the average cost of printing notes of each denomination differ. While, its `3.58 for a `500 note, the cost of printing increases for `1,000 note and stands at `4.06. The RTI also indicated that the small denomination bank notes have a lower average life than bank notes in higher denomination(`100, 500, 1,000).
To increase the life of the notes, the RGI has also sent their instructions to the banks recommending doing away of stapling of fresh note packets with paper/polythene bands so that the life of the currency notes is increased. It also suggested that banks shall forthwith stop writing of any kind on watermark window of bank notes. “The above measures will increase in life of bank notes and consequent reduction in the expenditure,” it said.
Currently, there are 11,540 million pieces of `2 and `5 in circulation, 4774 million pieces of `1,000, 10,934 million pieces of `500 and 14,119 million pieces of `100.
Meanwhile, the problem of counterfeit notes seems to have been increasing every year, with about 521155 total pieces of currency notes being detected to be counterfied, circulation of these notes were much less earlier.