Plastic Notes Coming Soon in India

I was just checking my mail updates and found good news and thought to share it on my business blog. Reserve Bank of India (RBI) has decided to introduce 100 crore polymer/plastic bank notes on a trial basis. These polymer or plastic bank notes will be in the value of Rs. 10 basis.

These notes circulation has been decided by keeping the environment in mind. The notes will be circulated in the five major cities, while cleanliness and durability are seen as the major advantages of these plastic notes. By the end of 2011 these polymer notes will be circulated on the different locations of India and would follow it up with plastic notes of other denomination (Rs. 20, Rs. 50, Rs. 100, Rs 500, Rs. 1000, etc).

These Polymer notes or plastic bank notes are already applied on 7 different countries like New Zealand, Sri Lanka, Malaysia, Hong Kong and Nepal. These countries also have additional capacity to produce plastic notes but RBI has decided to produce these plastic notes within the country in order to stop fake notes. Government has decided not to issue plastic notes of Rs. 5 denomination notes as they are focusing more on Rs 5 coin. Along with it RBI is trying to increase the production of Rs. 5 coin to meet the Rs. 5 coin stock in the market. As RBI has seen a better solution to prevent fake notes by introducing these polymer or plastic notes, these plastic notes will have enough safety features.

Predictable Pros and Cons of Polymer or Plastic Bank Notes for People in India

There are some certain advantages to the people in India by the circulation of these plastic notes. The durability and hardness of these plastic notes let the notes to last much longer than the normal paper notes and also be safe from the dirt so now there is no reason to argue with anybody (shopkeeper, rickshaw wala, coolie, auto wala, etc) to tell them to give you a better note. As these plastic notes are made up of polymer/plastic, they are waterproof. So, the people should not worry about getting their money wet in the rain or even forgetting the money in the pant’s pockets. The main problem as faced by Indians are fake notes, if the production of plastic notes are applied on Rs. 100, Rs. 500 and Rs. 1000 notes than people can get some relief from fake notes problem and also help in economic growth. These plastic notes are environment friendly, the polymer that is generally used in the manufacturing of the plastic notes is a biaxially-oriented-polypropylene hence are recyclable which is a plus point for the healthy environment.

As these plastic notes have some great benefits, let’s move towards the disadvantages or the factors that may affect Indians. Due to the harder in nature these plastic notes can be folded but once it is folded it cannot be straightened hence it is somewhat difficult to store. These plastic notes are well packed with some security features which may raise some difficulties to Indian but will get benefit government agencies in terms of security and trace-ability.

I've used plastic note in Nepal and faced some problem and want to discuss it here. The plastic note have found useless in Nepal. The main issue of rejecting these notes by the Nepalese was these notes color gets fade and once the wrinkles are occurred on note, these wrinkles couldn't get recovered and these increase the problematic issue for management. Secondly, if the noted were somehow turned it cannot be repaired or taped as glue cannot be applied on these plastic notes.

Hope government do a thorough survey across the countries which are already using such polymer/plastic notes before circulating or issuing these notes in the market. This will help to optimize the quality of the notes.

These were some of my views on the issue of Polymer or plastic bank notes by RBI, what’s your take??