The central bank must clarify whether we have the necessary technology and equipment to mint these polymer notes within the country and announce the timeframe within which these notes would be launched into the financial system
The Banking Ombudsman of Karnataka recently had organized a meeting in Mangalore. Reserve Bank of India (RBI) deputy governor, Dr KC Chakrabarty attended this Town Hall Meet, where, in reply to a question on plastic notes, he confirmed that these notes, in Rs10 denomination, “will be introduced on a trial basis”.
He stated that the average life of a paper currency note was about nine months, which got soiled and torn, whereas the plastic notes would last for several years. Besides, these notes will also prevent counterfeiting.
It may be recalled that Moneylife carried an article on the urgent need to introduce polymer currency notes (Polymer rupee notes: Slow or no progress? ) more than six months ago!
In fact, when that report appeared in Moneylife, the RBI had introduced polymer currency notes of Rs10 denomination in several selected cities, including Mysore in the south.
It is therefore surprising that KC Chakrabarty did not elaborate on this issue and say how this trial was received, not only in Mysore, but in other centres as well? Why he did not share the news of this introduction for market testing in the selected cities is a mystery!
It is well-known that Australia is the pioneer which introduced the polymer currency notes more than two decades ago and is one of the most successful exponents of this system.
While we appreciate that an attempt is being made in the right direction, we must not overlook that circulation of counterfeit currency has increased and the media reports appear, from time to time, that large quantities of supplies are coming through smugglers across the border. Arrests are also made and police reports indicate that distribution chains are well entrenched all over the country. These reports also show that supplies are emanating from Pakistan and smuggled via the land borders of Bangladesh and Nepal.
In any case, with elections around the corner, this influx of counterfeit notes is likely to increase and disrupt our democratic election process.
What we need to do, on a war footing, is to obtain supplies of polymer notes of Rs500 and Rs1,000 denominations and introduce them immediately. It is believed that the counterfeit notes are mostly in these denominations, and so, if the ultimate intention is to stop these coming into circulation, the RBI must go hammer and tongs at getting the polymer notes. Introducing polymer notes in Rs10 denomination would not be very useful.
RBI knows that Australia has the knowledge and expertise in polymer notes. It is not easy to counterfeit the polymer notes and our efforts should be to get the higher denominations in these notes rather than Rs10.
It is imperative that RBI must make a clear-cut statement on the progress made so far in the trial that was carried out in selected cities. The central bank must clarify whether we have secured the necessary technology and equipment to mint these polymer notes within the country and categorically announce the time-frame within which India will launch this into the financial system.
In the meantime, our security forces at the borders must be trained and intelligence system intensified to prevent large-scale smuggling of currency which goes undetected!
(AK Ramdas has worked with the Engineering Export Promotion Council of the ministry of commerce and was associated with various committees of the Council. His international career took him to places like Beirut, Kuwait and Dubai at a time when these were small trading outposts; and later to the US.)
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You appear to undermine the intelligence and responsibility of Indians and please do not say that they are not capable of using these polymer notes. If they are able to accept and use soiled and torn paper currency notes, they are perfectly capable of using the polymer notes.
The question here is stopping the counterfeit notes that will undermine our democratic system. Certainly, polymer notes will not reduce corruption, but that is because everyone who uses this system does it for expediency and irresponsibly.
Be proud, sir, Indians are a force to be reckoned, and it is our core responsibility to ensure that we do not fall into or encourage corrupt practices.
http://www.abc.net.au/news/2012-08-20/fo...
""''Brown commented that agents had many expenses and were very well connected, with access to the highest levels of the central banks and often the government itself,'' he said in his statement.
''The actual word 'bribery' was carefully avoided,'' he said, but he was told ''Securency paid the agent in India $US120,000 on the understanding that his money would then be forwarded to a political party in the lead-up to the Indian national election''.""