The government has asked the Reserve Bank of India to complete preparations for the field trial of Rs 10 notes soon. These notes are expected to first hit Mysuru, Kochi, Jaipur, Bhubaneshwar and Shimla.
The move is expected to save cost to the exchequer and give an enhanced life to the currency notes as opposed to the paper currency notes.
The RBI is also expected to inject enhanced security features to the new plastic notes which will make counterfeiting difficult. Sources close to the development said that the RBI has begun procuring plastic polymers for such currency notes, whose field trial should begin during in summer.
The note have 2.5 times longer life span than the paper currency notes and production cost is much cheaper than the existing Rs 10 coins. But it remains to be seen whether these notes can withstand the extreme weather conditions in India. Some fear that the kind of plastic used in making currency notes is susceptible to heat. It is due to this reason that cities across India representing different weather conditions have been chosen.
Once the field trial succeeds, the government will try to bring the plastic notes across the country. Sources privy to the development said the notes will be smaller in size and the shape may resemble the credit/debit cards which are easier to store in a wallet or purse.
The idea was floated way back in 2014 but could not be implemented till date. Now, the preparations have begun on a more serious footing as the government wants to save cost on manufacturing of currency notes. The initial cost for disbursement of these notes, especially through ATMs, is expected to be more as the machines will have to be recalibrated to accomodate the new notes.
The plastic currency notes were pioneered by Australia and later follwed by countries like New Zealand, Denmark, Scotland and others.