RBI to issue polymer notes of Rs 10 denomination in five cities

Soon you will see polymer notes of Rs 10 denomination in the market. The Reserve Bank of India will be issuing 100-crore polymer notes of Rs 10 denomination to improve their longevity and to thwart counterfeiters.

While speaking at the Foundation Stone laying function for the Bank Note Paper Mill at Mysore RBI governor D Subbarao told that in the beginning RBI will be introducing these notes in five cities. Globally, currency authorities of many advanced economies such as Canada and Australia have already introduced the polymer currencies.

The governor said polymer notes are more environment friendly. He added, “Considering the relatively long life of polymer notes and their amenability to re-cycling, the ‘carbon footprint’ of polymer notes vis-à-vis paper banknotes is likely to be on the plus side. Regardless, this is one of the issues that we will study during the pilot phase, and will embark on polymer notes on a long-term basis only if the cost-benefit calculus is decidedly positive in all dimensions.”

This year India will be printing around 17 billion pieces of paper currency. He said, “Producing our own paper is decidedly cheaper, and a check against counterfeiting.” In international terms India’s demand for banknote paper — 18000 MT per year is quite huge, and there are just 3/4 large producers. Mr Subbarao said, “This situation exposes us to vulnerabilities of a suppliers market in terms of price, quantity and timelines, something that we should avoid or minimize.” He added the major countries like the US, Japan, China, Brazil, Russia and countries in the euro area and even smaller countries like South Korea, Indonesia, Iran and Pakistan make their own bank note paper.

Expressing his views on the trend in counterfeiting he said, “By an international metric, the incidence of counterfeit notes in India is not alarming” and added that counterfeiting per se is a matter of serious concern for the government and RBI.

As per the figures, Australia detected seven pieces of counterfeit notes per million notes in circulation (2008-09), in Canada it was 76 (2008). In New Zealand, there are 0.71 counterfeits per million notes in circulation (2008-09), whereas in Switzerland it was 10. As for the euro, there was roughly about one counterfeit per 14,600 bank notes in circulation (2008).

Whereas in India, in 2008-09 fake notes detected by banks and fake notes found in remittances received by RBI amounted to eight for every one million notes in circulation. Mr Subbarao clarified this data does not include the counterfeits that were seized by the police.