Plastic Currency Notes: Features, Benefits, Disadvantages
As per the notification from RBI and government’s decision, Indians will soon see plastic currency notes. This is another big decision after the demonetization (i.e. currency note ban).
What are these notes?
Notes which are made of any form of plastic are called as plastic currency notes.
What type of plastic would be used in India to print the notes?
These notes would be prepared from plastic or polymer substrate.
Benefits over paper currency notes & differences
Difficult to imitate / Security: The most important reason behind the launch of plastic currency note is that it is to prevent counterfeiting i.e. fake currency. Paper notes are easier to imitate and when in wrong hands leads to negative impact on economy. In addition to this, fake paper notes are majorly printed and are in use for funding terrorism, which has since ages affecting India’s internal security. So basically it would help India’s economy in the long run.
In comparison, polymer notes have security features which is not possible in paper notes. These features can be detected by individuals, machines, and authority which issues the notes. Reproducing polymer notes through photocopy or scanning is very difficult.
Long life: Plastic currency notes have longer life typically 5 years. In comparison paper notes may or may not have longer life unless and until they are preserved or kept unused. You can take example of visiting card made of plastic and paper. Plastic ones are difficult to tear and have longer life as dirt can be easily removed. You might have come across a situation when shopkeeper rejects to accept a torn paper currency note. This will end once plastic money comes to use.
Quality: Is much better than paper money.
Environmental impact: Since plastic note lasts longer, the production cost is reduced and environmental impact is much lower as paper is saved.
Read more on effects of currency note ban.
Disadvantages of plastic currency notes:
- Plastic is harder than paper. So carrying these notes will be difficult. Folding will be also harder.
- Calibrating the ATM will be expensive initially. However in the long run, the impact on economy would be greater.
- Printing would be initially costly as material would be imported.
- Counting by hands is difficult as plastic is more slippery.
How many notes would be first available and of which denomination?
Over 1 billion notes made up of plastic would be first printed of denomination of Rs. 10.
Will these notes be available across India?
No. These notes would be first put on a trial in 5 cities – Jaipur, Shimla, Bhubaneshwar, Mysuru, and Kochi. The possible reason to launch these notes in select cities could be to test them in varying weather conditions. The temperature of these cities is typically cold. In summer or humid places, plastic notes might fade due to temperature and its color and texture may get spoiled and might start limping.
Who would be best benefited from these notes?
Although these notes would benefit every individual, it would benefit certain businesses such as fishing, factories, mining and others where there is lot of dirt and water. In such places, paper notes are easily damaged.
Will it be available in ATM? Once the testing is successful, it is expected that ATMs would be calibrated to dispense such notes.
Who would be printing the plastic notes?
The Bharatiya Reserve Bank Note Mudran Private Limited (BRBNMPL) and the Security Printing and Minting Corporation of India Limited (SPMCIL) would be supplying the notes. Both these organizations are selected by Reserve Bank of India. The procurement of plastic material has already started.
In which countries plastic currency notes are used?
There are around 30 countries across the world where such notes are already in use. Few of them are Australia, Singapore, Indonesia, the UK Malaysia and Canada.
Are plastic notes environment friendly?
Yes. The printing consumes less energy and assures being efficient in reducing global warming.