Currency
Plastic currency notes coming to India? RBI revives decade-old plan
Mumbai/IBNS: India may soon revive its decade-old plan to introduce plastic currency notes amid rising demand for banknotes, according to a report by Business Standard.
RBI Revives Polymer Note Plan
The Reserve Bank of India (RBI) has reportedly revived discussions on printing polymer-based banknotes for circulation as currency demand has steadily increased over the past few years.
The proposal was discussed during the RBI board meetings held in Patna and Mumbai, and the project is expected to be rolled out soon.
Why Plastic Notes?
Polymer or plastic currency notes are considered advantageous both economically and from a sustainability perspective.
These notes are cheaper to produce, more durable, and have a longer lifespan compared to traditional paper currency.
The cost of producing paper currency notes rose sharply to Rs. 6,372.8 crore in 2024-25 from Rs. 5,101.4 crore in the previous financial year.
Soiled Notes Becoming A Challenge
Data also showed that 23.8 billion soiled banknotes were disposed of in FY25, marking a significant increase from 21.24 billion pieces in the previous fiscal year.
According to Business Standard, sources familiar with the matter said: “There are clear advantages in the cost of production of such notes compared to the paper notes currently being used.
“Moreover, automated teller machines (ATMs) would be enabled to dispense polymer-based notes. We have the wherewithal to do this now.”
Focus On Lower Denomination Notes
Demand for lower denomination notes such as Rs. 10 and Rs. 20 remains significantly high, though their share in overall circulation continues to stay low.
The RBI’s earlier efforts to encourage the use of coins as a replacement for small-value notes reportedly failed to achieve the desired results.
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