New Delhi: It may not be long before India gets plastic currency notes.
The pilot project of the Reserve Bank of India (RBI) is likely to be rolled out with smaller denomination Rs 10 and Rs 20 notes. Based on the results of the trial, India’s central bank will decide on a full-scale rollout from 2027, NDTV Profit reported, citing sources.
The main reasons behind RBI’s move — which was discussed at its last two board meetings – is a surge in cost of printing paper and longer shelf life of polymer currency notes.
These currency notes are printed on a thin, flexible plastic material, instead of the cotton-based paper which is used in conventional currency.
The ‘plastic’ notes won’t be as firm as debit or credit cards. In fact, the polymer banknotes are lightweight and easily foldable. Hence, they can be handled in the same way as paper notes.
The main advantage of polymer banknotes is durability. Being more resistant to moisture, dirt, and wear and tear, these notes should be in circulation for a longer period of time than paper notes.
Also, it will be possible to incorporate enhanced security measures like transparent windows, micro-optic holograms and specialised inks in polymer notes, which will make these more difficult to counterfeit.
History of polymer notes
Australia was the first country to issue a polymer ten-dollar note in 1988.
Thereafter, over 60 nations have introduced polymer banknotes, either fully or partially into their monetary systems.
Some of the countries to have adopted ‘plastic’ money are Canada, the United Kingdom, Singapore, Malaysia, Thailand, Indonesia, Romania, New Zealand and Vietnam.
Rise in printing costs & damaged notes
RBI’s decade-old plan to bring polymer banknotes into circulation is finally set to be translated into action at a time when there has been a sharp rise in currency printing costs and also the volume of damaged and discarded notes.
According to Business Standard, the cost of printing currency notes rose to Rs 6,372.8 crore in the financial year ending March 2025 – an increase of Rs 5,101.4 crore from previous year.
As for soiled notes, around 23.8 billion banknotes were removed from circulation in FY25 – a 12.3% from previous year.