RBI Considers Plastic Currency Notes Again as Printing Costs Exceed Rs 6,300 Crore
RBI Considers Plastic Currency Notes Again as Printing Costs Exceed Rs 6,300 Crore
New Delhi, May 31 : Country may soon see polymer-based currency notes in circulation as the Reserve Bank of India revisits an old proposal to introduce plastic banknotes. This comes in response to rising printing costs and increasing demand for cash.
Recent RBI board meetings have discussed this matter, and a pilot project is expected to be announced soon. The focus will likely be on lower denomination notes, such as Rs 10 and Rs 20, because these notes circulate frequently and wear out quickly.
This renewed effort follows a rise in the cost of printing banknotes, which reached Rs 6,372.8 crore in FY25, a significant jump from Rs 5,101.4 crore the previous year. At the same time, the number of damaged and soiled notes taken out of circulation continues to increase, adding more strain to currency management.
Polymer notes, made from a durable plastic material, last much longer than traditional paper currency. They are also more resistant to moisture, dirt, tearing, and counterfeiting. More than 60 countries, including Australia, Canada, Singapore, and the United Kingdom, have already adopted polymer banknotes.
India previously attempted a similar switch in 2012 with a pilot project for Rs 10 polymer notes. However, the plan was shelved due to various technical and operational issues. Sources now suggest that many of these technological challenges, including compatibility with ATMs, have been largely resolved.
Even with the rapid growth of digital payments, currency circulation in India continues to increase. This has led the central bank to look for cost-effective and durable alternatives for physical cash.
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