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Dec 13, 2012

RBI to Trial Rs.10 Plastic Currency Notes


The Reserve Bank of India will conduct a trial of plastic currency notes in five cities, Finance Minister P. Chidambaram said in Rajya Sabha on Thursday.

The central bank will introduce one billion pieces of Rs. 10 banknotes on polymer substrate on a field trial basis in five cities. The bank and the government have been mulling different options to elongate the life of bank notes, particularly in lower denominations.

The primary objective of introduction of polymer/plastic notes is to increase its life and not to combat counterfeiting, the finance minister said. The polymer banknotes are made from a non-fibrous and non-porous polymer.

Dispelling fears of the move fueling cutting of trees, the finance minister said the Indian Banknote paper is made from long fibres obtained from cotton comber and linter.

A study by the Energy and Resources Institute found that polymer notes would be more environment friendly than paper based currency, the minister said. 

The central bank had commissioned the institute to estimate the environmental impacts and carbon footprints of plastic currency vis-a-viz paper currency.