The RBI is not independent. It was never meant to be. Consequently, we are used to the phenomenon of the RBI proposing something and North Block disposing. That’s evidently happened with BOPP too. BOPP is biaxially oriented polypropylene and has multiple uses, including polymer banknotes. These polymer banknotes were developed by Australians in an attempt to curb counterfeiting and were introduced in 1988. (An alternative polyethylene called Tyvek hasn’t quite taken off.) One is not talking about commemorative banknotes and collectors’ items. The idea is to replace paper currency with polymer currency. First, security is better and counterfeiting becomes more difficult. That doesn’t mean counterfeiting is impossible. It only becomes more expensive and takes more time. Second, polymer currency lasts longer. Conventional paper currency lasts 6 to 9 months. Polymer currency lasts at least four times longer. So though initial costs are higher, life-cycle costs are lower. Third, recycling is less of a problem, since polymer can be converted into other forms of plastic and we end up saving more trees. Fourth, once plastic notes are produced in bulk, economies of scale mean lower costs and India has a domestic polymer industry too. Fifth, plastic currency is more resistant to moisture, sweat, oil and water.

Sixth, though this is a bit difficult to swallow, plastic currency is non-cellulosic, while paper currency is cellulosic. The former doesn’t allow microbes to grow, the latter does. So, plastic currency is better hygiene and health-wise. Even if this is difficult to swallow, plastic currency clearly can be wiped clean and washed more easily. Nor does it wrinkle. Other than Australia, six other countries have gone completely polymer — Bermuda, Brunei, New Zealand, Papua New Guinea, Romania and Vietnam. Those that have some polymer currency are Bangladesh, Brazil, Chile, Hong Kong, Indonesia, Israel, Malaysia, Mexico, Nepal, Singapore, Sri Lanka, Thailand, Samoa and Zambia. Evidently, polymer currency has benefits.

... contd.