When it comes to shopping, “paper” is always the greener answer. But now India’s central bank is going plastic – and that may not be all bad. In the world of currency, plastic notes are promoted as the cleaner, more durable and harder to fake alternative to paper. They might even be greener.
The Reserve Bank of India plans to issue one billion pieces of polymer-based banknotes of 10-rupee denomination in five cities as part of a field trial. Right now India only uses paper money, 95% of which is printed on imported paper. That leaves the country at the mercy of what the RBI has called “a strong oligarchy” in the banknote paper market, as well as escalating currency paper costs.
Jaipur, Bhubaneswar, Mysore, Shimla and Kochi will be the first cities to try out the plastic notes at a date yet to be decided, the RBI said late Thursday in response to a follow-up query.
“The locations for the trial have been chosen for their climatic diversity among others, including humid conditions,” an RBI spokeswoman told India Real Time via e-mail.
India is second only to China as the largest producer and consumer of currency notes after being a latecomer to the world of paper money, a delay that RBI governor Duvvuri Subbarao attributes to the collapse of the Mughal empire.
Plastic money doesn’t absorb water, oils or sweat, unlike paper notes, which are cotton-based and naturally absorbent. In the fiscal year ending March 31, 2009, almost 12 billion banknotes, nearly a quarter of all notes in India, were deemed so soiled they had to be taken out of circulation. The plastic stuff is supposed to last five times longer, according to leading polymer note manufacturer Securency International, a joint venture between the Reserve Bank of Australia and another firm. So far, 29 countries have issued plastic-based notes, starting with Australia in 1988.
In a sign of the times we live in, Mr. Subbarao says that the central bank will look at the carbon footprint of polymer notes as well as cost before making a final decision on whether to introduce more of them.
“Considering the relatively longer life of polymer notes and their amenability to recycling, the ‘carbon footprint’ of polymer notes vis-à-vis paper banknotes is likely to be on the plus side,” Subbarao has said.
But recycled into what? Things like compost bins, plumbing fittings and other household and industrial products. In other words, more plastic.