“I promise to pay the bearer the sum of…” will never be the same again – at least in the new series of Rs 200, Rs 100 and Rs 50 notes that will soon be available across India. The reason: The promissory clause, which appears on all Indian banknotes, will now be done in offset and not intaglio printing on the three new notes, leaving a “fairly large scope” for counterfeiting.
Revealing this to The Quint, Reserve Bank of India (RBI) sources said that the central bank’s basic objective is to cut production costs for the three banknotes (Rs 200 will have an orange hue and the Rs 50 notes will be turquoise blue) in the face of the “huge expenditure incurred” for printing the new Rs 2,000 and Rs 500 notes following last November’s demonetisation decision.
- “I promise to pay the bearer...” clause will now be done in offset and not intaglio printing
- RBI sources said that the central bank’s basic objective is to cut production costs on new notes
- The new process could make the Rs 200, Rs 100 and Rs 50 notes “fairly vulnerable” to counterfeiting
- The RBI’s decision to not use optically variable ink (OVI) will also result in a risk
India-Made Printing Paper
The Quint had on 7 December 2016 – a month after the demonetisation announcement – reported that the “design and security features of (the proposed new Rs 50 note) banknotes will be similar to the banknotes of the Rs 50 denomination, with the ascending font of numerals in both number panels and without intaglio print issued earlier in Mahatma Gandhi series-2005.”
Besides, as part of the Narendra Modi government’s efforts to make banknote production indigenous, the RBI has instructed its wholly-owned subsidiary, Bharatiya Reserve Bank Note Mudran Pvt Ltd (BRBNMPL), to use India-made currency note printing paper manufactured at the Banknote Paper Mill operated by a joint venture company (with a production capacity of 12,000 metric tonnes) in Mysuru.
In this context, RBI sources said that the soon-to-be-introduced Rs 200 and Rs 50 notes are being printed on indigenously manufactured currency paper.
Higher Denomination, Greater Cost of Printing
The RBI admits that the “trend” in production costs for banknotes has been steadily “increasing” as the “denomination becomes larger”. The growing costs is “explained by the fact that higher denomination notes require more complex features embedded in them”.
The RBI’s latest report claims that the “upsurge in expenditure during the year was on account of change in the production plan of printing presses due to the introduction of new design notes in higher denominations as well as the requirement of larger volume of notes for replacement of the demonetised currency”.
According to RBI data released on 30 August, the cost of printing doubled to Rs 7,965 crore in 2017 from Rs 3,421 crore in 2016 on account of production costs of the new Rs 2,000 and Rs 500 notes. At the same time, the volume of currency notes increased by 11.1 percent, mainly because of “higher infusion of banknotes of lower denomination in circulation following demonetisation”.
But dispensing with the relatively reliable intaglio printing method for banknotes with mid-range face values and replacing it with the offset process could make the Rs 200, Rs 100 and Rs 50 notes “fairly vulnerable” to counterfeiting, the RBI sources admitted.
Intaglio printing lends banknotes exclusive character, strong colours, striking portraits, ornamental designs and relief-style embossing.
In intaglio printing techniques and processes, an image or preferred letters are incised into a surface and the sunken areas hold the optical variable ink. According to the RBI, “the portrait of Mahatma Gandhi, the RBI seal, guarantee and promise clause, Ashoka pillar emblem on the left and the RBI Governor’s signature are printed in intaglio i.e. raised prints which can be felt by touch in Rs 20, Rs 50, Rs 100, Rs 500 and Rs 2,000 notes.”
On the other hand, in offset printing, the basic design of a banknote is laid out with the icons printed half on one side and half on the other, forming a complete image when seen in transmitted light. Basically, this process involves printing the front and back of the banknotes simultaneously.
What Makes New Notes Vulnerable to Counterfeiting
What will make the proposed new Rs 50 and Rs 20 notes especially vulnerable to counterfeiting is the RBI’s decision to not use optically variable ink (OVI), which is a time-tested and “extremely effective” anti-counterfeiting element, during printing of the two currency notes. However, OVI, which India imports from SICPA, a Swiss company, for Rs 2 lakh per kg, will be used in the new Rs 200 note.
The RBI decided a few months ago to rejig the inset numbers (the alpha-numeric series that appears on all banknotes) and reassigned them to the four printing presses operated by the BRBNMPL and the Security Printing and Minting Corporation of India Ltd (SPMCIL) which is under the finance ministry.
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