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If everything goes according to plan, then in the coming New Year you will be able to see in your pocket notes made not of paper but of plastic or polymer. In this direction, the Central Reserve Bank of the country (RBI) has fully geared up and has come into action mode. The government has given the green signal to RBI to introduce plastic notes of Rs 10 and Rs 20. At present, permission has been given to print about two billion notes under the pilot project, but some technical challenges and expenses also stand in the way of implementing this big change.

Major changes will have to be made in ATM machines, it will cost heavily

A senior official of a big government bank said on the condition of anonymity that this polymer note plan of RBI is going to cost a lot. The main reason for this is that the 'cassette' that keeps the cash inside the ATM machines will have to be changed. These plastic notes cannot be loaded into existing Automated Teller Machines (ATMs) without changing the cassette. However, banks have not yet decided the exact figure as to how much this entire process will cost.

According to the banker, the cost of replacing a complete ATM comes to around Rs 2 lakh, whereas the cost of replacing only the cassette will be slightly less than that. The biggest problem is that at present there is no company in the country that manufactures these special cassettes, hence a long discussion will have to be done about importing them from abroad. Experts say that adopting polymer notes in the initial phase proves to be very expensive. When the size of currency notes was changed in the country a few years ago, it took almost a year long for banks to update the cassettes of all the ATMs. Let us tell you that cassettes are boxes in which notes of different denominations are kept safe inside the ATM and a separate cassette is fixed for each note.

When will the new introduction of plastic notes start?

If everything goes well and as per plan, these new plastic notes will reach the hands of the common people of the country by the beginning of the next financial year. Recently, RBI Governor Sanjay Malhotra had informed that initially these notes will be introduced only as pilot testing. If this initial test is successful, its scope will be expanded further.

The RBI Governor clarified that if everything goes as per plan, the target is to launch it among the public in the initial months of the next financial year. For this, tenders have been invited for special polymer paper (substrate). After the completion of the tender process, many types of technical tests will be conducted on it, all security approvals will be taken because it includes many types of modern security features. When the time comes, official information about all these things will be shared with the public.

Why is it important to bring plastic or polymer notes?

There are mainly two main objectives being stated by the government and RBI behind the introduction of plastic notes. The first biggest advantage is that it increases the life span of currency notes manifold. This especially applies to low value notes like Rs 10 and Rs 20, which move very quickly from one hand to another and get torn or worn out quickly.

These plastic notes are being used successfully in many countries of the world for the last 30 years. Experiences there have revealed that polymer notes last three to four times longer than normal paper notes. Apart from this, this will also significantly increase the printing and management capacity of the Reserve Bank. In view of the country's growing economy and demand for money, it has become extremely important to expand such modern capacity.