New Delhi,July 10 (): To curb the menace of counterfeiting of notes, the Reserve Bank today said it is working on a pilot project on launching plastic currency in select cities. RBI has also opened a web site on steps to detect fake notes.
RBI said that counterfeiting of plastic notes is near impossible and so the apex bank is planning to launch some plastic notes on a pilot basis in 4-5 centres in Jaipur, Shimla, Bhubaneshwar and other centers. The work has started, RBI Deputy Governor H R Khan told reporters here.
Under the pilot project for issue of plastic currency notes, of Rs 10 denomination would be distributed through the central banks’ five regional offices.
The move is primarily aimed not only at checking the counterfeiting but also high cost linked to printing of paper currency, as they need high quality paper and an early replacement due to soiling and mutilation. The average life of a paper currency is one year while that of plastic notes would be five years.
Australia was the first to use plastic notes to safeguard against counterfeiting of currency. After Australia , other countries which introduced plastic notes were New Zealand, Papua New Guinea, Romania, Bermuda, Brunei and Vietnam.
These notes would have an average life span of 5 years compared to one year for the paper currency.
Prime Minister’s Economic Advisory Council (PMEAC) Chairman C Rangarajan said that the Reserve Bank in absence of softening of inflation cannot cut interest rates in its monetary policy review later in the month.
Rangarajan says Indian situation is different from situation in other countries. In other countries, even though growth rate is low the levels of inflation at the same time is also low, whereas in India while the growth rate is slowing down, inflation continues to be at the highest level ever.