NEW DELHI: The government intends to print plastic notes and has already started procuring material for them, Parliament was told on Friday.
“It has been decided to print banknotes based on plastic or polymer substrate. The process of procurement has been initiated,” Union minister of state for finance Arjun Ram Meghwal said in a written reply in the Lok Sabha.
He was responding to a question on whether there was a move by the Reserve Bank of India to print such notes.
In 2014, the government had told Parliament that it planned to introduce plastic notes in the denomination of Rs 10, and that one billion plastic notes of this denomination would be introduced in a field trial in five cities.
It had said the primary objective behing the introduction of polymer/plastic notes was to increase the life of banknotes and not to combat counterfeiting. The cities selected for the field trial were Kochi, Mysuru, Jaipur, Shimla and Bhubaneswar. The RBI had also said that since the proposal was at a trial stage, the decision on the replacement of the notes currently in circulation with with plastic ones would depend on the outcome of the field trial.
Polymer banknotes were first issued in 1988 by Australia, which now uses polymer exclusively and launched a new series of notes earlier this year. Polymer is used in over 20 countries as diverse as Australia, Canada, Fiji, Mauritius, New Zealand, Papua New Guinea, and Vietnam, according to an IMF document.