India plans to experiment with polymer currency notes

Sify Correspondent
2009-08-27 22:35:15
Last Updated: 2009-08-27 22:42:28

New Delhi: Jolted by the discovery that its 2005-6 series of Rs 1,000 notes, considered almost impossible to fake, have been duplicated, the Indian Government is planning to take a leaf from Australia and experiment with polymer currency notes.

A pilot project to introduce polymer currency notes is being finalised, a senior finance
ministry official confirmed.

'Compromised' template reason behind fake notes: CBI

As a starting point, senior officials said the RBI is planning to experiment with a million such notes of Rs 10 each based on plastic bank note technology.

Polymer currency notes developed by Australia are said to be very difficult to counterfeit. They are also more durable as they are made of non-porous polymer with a protective coating that prevents absorption of moisture.

The Reserve Bank has written to public-sector and private-sector banks that Mumbai Police recently seized fake notes, with the face value of Rs 1000 in the series 2 AQ and 8 AC bearing governor Y.V. Reddy's signatures.

This is the first time that counterfeiting of notes with new, strengthened security features like optically variable ink, colour shift, security thread, etc, has been brought to our notice," the letter says. The counterfeiting ... is very much akin to genuine notes."

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A report prepared by a joint venture floated by the Australian Reserve Bank, which owns the technology for polymer notes, says, The ability to create transparent areas (or clear and complete windows) is a prime security feature" that makes counterfeiting difficult.

These windows are visible in a range of lighting conditions", while another optical feature changes colour when tilted under a light source". Polymer notes also allow embossing and shadow images like paper notes.

Polymer notes are used in about 20 countries, including Australia, New Zealand, Romania, Bangladesh, Brazil, China, Mexico, Singapore and Sri Lanka. The central banks of these countries have put out studies claiming the use of polymer notes have drastically reduced counterfeiting.

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None of the bigger nations, however, has adopted polymer notes -- one reason India has been hesitant about the technology. Some analysts say that whatever material is used to print currency -- polymer, paper, or paper mixed with other material -- it is the security features that prevent counterfeiting.

Indian security agencies believe the fake notes are being pushed in across three borders -- from Pakistan through Gujarat and Rajasthan, from Nepal, and from Sri Lanka through organised boat gangs.

New Delhi had raised the issue with the Nepal Prime Minister during his recent visit. The other security concerns raised were that Nepal's soil was being used for terrorist and other anti-India activities.

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