"The selected bidders failed in meeting the technical specifications of the plastic banknotes in Rs 10 denomination that RBI is proposing to introduce on a trial basis, necessitating undertaking the exercise afresh, thereby delaying the process," senior RBI functionary has said.
Government in February had informed Parliament that one billion plastic notes of the denomination of Rs 10 will be introduced in a field trial in five cities selected for their geographical and climatic diversity. The selected cities are Kochi, Mysore, Jaipur, Shimla and Bhubaneswar.
Minister of State for Finance Namo Narain Meena had informed the Lok Sabha that the field trial is expected to be launched in the latter half of 2014. Plastic notes have an average life span of about five years and are difficult to imitate. Also, currency notes made of plastic are cleaner than paper notes.
Plastic notes were first introduced in Australia to safeguard against counterfeiting of currency. Several countries in the West have introduced plastic notes for their advantage over normal notes.
The cost of currency production in India has been rising over the years. As per the RBI, the expenditure was Rs 2,376 crore in 2010-11, Rs 2,736 crore in 2011-12 and Rs 2,872 crore in 2012-13.
Also, the two note printing presses, BRBNMPL and SPMCIL, exhibit an increasing trend in their overall expenses. RBI also has incurred an expenditure of Rs 523 crore for acquisition, upgradation and overhaul of its 59 CVPS machines and 28 SBS (Shredding and Briquetting system) machines employed for destruction of soiled notes.