Govt Policies & Interventions

KEY POINTS

·        Polymer substrate bank notes are made from polymers such as bi-axially oriented polypropylene (BOPP).

·        Polymer notes, with their inherent advantages, can be a game changer in the Indian money market, in due course.

Advantages

·        Counterfeiting is very difficult when compared to cotton notes.

·        Polymer banknotes are expected to lasts much longer than cotton substrate-based banknotes.

·        In the long run, polymer notes are expected to reduce expenses incurred on printing currency, as they last longer.

·        Cotton notes have high wear and tear and cannot be recycled. Destroying them has also incurred huge expenditure annually.

·        But, polymer notes cannot be torn, do not wear out and can be recycled at minimal cost.

·        Cotton substrate currency notes can carry dozens of micro-organisms that can cause diseases like tuberculosis, ulcers, dysentery etc.

·        Polymer notes are relatively cleaner compared to paper notes.

Challenges

·        Upgrading Infrastructure – ATMs need to be recalibrated to accommodate new currency notes.

·        Extreme of Climates – More ground work has to be done to check the ability of the plastic notes to withstand the extreme climates of India.

·        Sourcing adequate supply of raw materials and the know-how to introduce polymer currency notes is the next major challenge.

Road to future

·        It may be worthwhile to consult countries such as Australia, the UK and Canada that by now have adequate experience in using polymer bank notes.

·        As a first step, India has decided in 2017 to conduct field trials with plastic banknotes at five locations in the country.

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