Blue paper to be used for Rs500-1,000 notes

Every time you get a Rs500 or Rs1,000 note, you check to see whether it’s genuine or not. A few months down the line, life should be easier. The government has decided to use special “blue paper” to print high-value notes, as these are difficult to counterfeit. These notes will be available by end-2010.

Blue paper is produced using cotton and linen fibre as raw material. This paper glows when passed under ultraviolet rays (or even tubelight). It is made using a special dye, which gives it its unique blue tinge that makes it almost impossible for even high-quality photocopiers to accurately match the shade.

The move to shift to blue paper comes in the wake of large-scale circulation of fake notes, allegedly by Pakistan’s Inter Services Intelligence (ISI), as part of its broader effort to destabilise the economy and fund terror activities.

According to sources in the Security Printing and Minting Corporation of India (SPMCI), responsibility for printing the new counterfeit-proof notes has been entrusted to the Nashik Currency Note Press (CNP).    

The Union finance minister has made a provision of Rs 1,063.20 crore for printing new currency notes and coins in this year’s budget.

The CNP is currently in the process of procuring blue paper, which will help banks and other agencies to check the authencity of notes. Even if the currency is torn or soiled, it is easier to detect fakes in this category.

Blue paper has to be imported. “There are a limited number of manufacturers of this kind of paper and they keep foolproof inventories of sales and clients. Fear of being caught and the higher cost of paper would also deter the counterfeiters from procuring the paper,” said a highly-placed official.

“The blue security paper has higher durability compared to normal currency notes. While it is costlier to produce, it is cheaper than having to deal with fake currency,” said a senior official.

To start with, the CNP is in the process of procuring 100 metric tonnes (4,900 reams) of unwatermarked blue paper to print Rs 500 denomination notes. Another 35 tonnes (1,650 reams) will be used for Rs 1,000 notes, according to the official CNP website.

“The supplier would be finalised by the end of June, 2010, and the blue paper will reach us within the next 45 days”, the official added. If all goes well, the new notes will be available to the public by the end of the year.