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Central Government Decides to Launch Plastic Currency Notes

The Reserve Bank has been planning, for a long time, to launch plastic currency notes after successful field trials.

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The government on Friday informed the Parliament that a decision has been taken to print plastic currency notes. Procurement of the material has already begun.

“It has been decided to print banknotes on plastic or polymer substrate. The process of procurement has been initiated,” Minister of State for Finance Arjun Ram Meghwal said in a written reply in the Lok Sabha to a query on whether the RBI proposed to print plastic currency notes in place of paper ones.

The Reserve Bank has for a long time been planning to launch plastic currency note after field trials.

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In February 2014, the government had informed Parliament that one billion plastic notes of Rs 10 denomination would be introduced in a field trial in five cities selected for their geographical and climatic diversity. The selected cities were Kochi, Mysore, Jaipur, Shimla and Bhubaneswar.

Plastic notes have an average life span of about five years and are difficult to imitate. Also, currency notes made of plastic are cleaner than paper ones. Such notes were first introduced in Australia to safeguard against counterfeiting.

Replying to another question, Meghwal said he was informed by the RBI in December 2015 that they received some banknotes of Rs 1,000 which didn’t have security threads. They were printed at the Currency Note Press (CNP), Nashik, on paper supplied by Security Paper Mill (SPM), Hoshangabad.

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An enquiry has been initiated by the Security Printing and Minting Corporation (SPMCIL) and the units involved (SPM and CNP).

"Major penalty chargesheet has been issued to the personnel concerned. Disciplinary proceedings have been initiated as per departmental rules," the minister said.

Meghwal further said action has been taken to strengthen quality procedure and online inspection system in the manufacturing process and special training has been given to the persons concerned to avoid such types of mistakes in future.

"Additional inspections have been introduced to ensure defect-free production," he said.

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Topics:  Demonetisation   Currency Ban 

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