It won’t be easy to fake these

The Reserve Bank of India (RBI) has set the ball rolling for plastic currency notes. In a notice on September 9, the RBI asked for expressions of interest for the supply of 100 crore pieces of Rs10 denomination polymer notes. This is the first step in what could be a permanent change in the type  of currency notes used in the  country. But there is no decision yet on whether plastic notes are the way forward.

“There is no clear timeframe (on polymer notes). Even the tenders haven’t been floated,” an RBI  official said. Polymer notes can fix the third security hole in currency (the first two are: fake notes coming in through bank cash replenishment agents; and ATMs being refilled with fake notes), said Sunil Udupa, president and chief executive officer, AGS Infotech, which manufacturers fake note detecting machines.

“Currently, RBI uses tricot material (a mixture of paper and cotton) for currency notes. If polymer notes are used, it will no longer be economically viable for someone to manufacture fake notes.”

Not only are polymer notes difficult to duplicate, but also they have a longer shelf life compared to paper. “Polymer notes last for five years whereas the shelf life of a paper note is six months. It is true that polymer notes are more expensive to print, but the cost is worth it because of the longevity of the notes,” the RBI official said.

But there are concerns because of which the RBI is reluctant to introduce the notes without thorough research. “Ours is a hot, humid country. Also, the note handling habits of people here are different. We prefer to fold notes,” the official said. A polymer note cannot be folded easily. Besides, a small tear can make the note rip in two halves. “The advantage is that these notes stay clean for a long time.” The notes can be washed with soap and water and dried with a cloth but cannot be ironed.

The Monetary Authority of Singapore, while issuing polymer notes in the country, issued a circular on handling polymer notes, in which it said: “The benefits of durability, cleanliness and ease of handling of polymer notes should become apparent over time, and any misconception will be allayed with more information and experience with the notes in circulation.”

The advice is relevant for India, particularly: “The unique feel of polymer notes is an important authentication feature, and it is thus important for members of the public to be accustomed to it. At the same time, as polymer notes are different from paper notes, the initial handling may need some flexibility in approach, and this guide serves as a reference in adjusting to the new technology.”

In its notice, the RBI has asked interested parties for 500 pieces of sample banknotes. The expression of interest will be followed by a pre-bid meeting, after which global bids will be announced.

“Inviting expressions of interest is just a process of collecting data. The bidding process will be preceded by a pre-qualification round for which separate applications shall be invited,” the RBI official said.