Plastic notes are soon to hit the market. The Reserve Bank of India has decided to launch 100 crore polymer notes of Rs. 10 each to improvise the longevity of the notes and at the same time as an effort to fight back fake notes.

"This pilot experiment has been taken up as part of the cost and longevity program of the RBI's currency management; after consultation with the Union government," he said at the event.

The concept of polymer notes has been already tried by developed majors like Canada and Australia.

The notes would be environment friendly, the Governor said. "Considering the relatively long life of polymer notes and their amenability to re-cycling, the ‘carbon footprint' of polymer notes vis-à-vis paper banknotes is likely to be on the plus side. Regardless, this is one of the issues that we will study during the pilot phase, and will embark on polymer notes on a long-term basis only if the cost-benefit calculus is decidedly positive in all dimensions," he added.

India would be printing around 17 billion pieces of paper currency this year. Producing our own paper is decidedly cheaper, and a check against counterfeiting," he said. India's demand for banknote paper - 18000 MT per year - is huge in international terms, and on the supply side there are just 3/4 large producers. "This situation exposes us to vulnerabilities of a suppliers market in terms of price, quantity and timelines, something that we should avoid or minimize," Mr. Subbarao said.

He also said that major countries like the US, Japan, China, Brazil, Russia and countries in the euro area and even smaller countries like South Korea, Indonesia, Iran and Pakistan make their own bank note paper.

Speaking on the number of fake notes detected in India per year, he said, "By an international metric, the incidence of counterfeit notes in India is not alarming."