The Reserve Bank of India is considering polymer banknotes to reduce the escalating cost of printing paper currency and manage rising volumes of soiled notes.
According to a Business Standard report, RBI discussed proposals for polymer or plastic currency notes during board meetings in Patna and Mumbai over the past two years.
Polymer notes are made from synthetic polymer. They are more durable, resistant to moisture and dirt, and difficult to tear. They can also be recycled efficiently even after damage.
Currently, 20 countries use polymer notes, including Canada, Australia, New Zealand, Fiji, Mauritius, Papua New Guinea, Vietnam, and Romania.
RBI’s annual report for FY25 shows note printing costs rose to ₹6,372.8 crore from ₹5,101.4 crore in FY24. The report cites higher demand for banknotes as the primary reason.
Managing soiled notes is another challenge. RBI withdrew 23.8 billion soiled banknotes from circulation in FY25, up 12.3% from 21.24 billion in FY24.
The shift to polymer aims to improve long-term usability and cut lifecycle costs of currency.
RBI Mulls Plastic Notes as Soiled Note Disposal Jumps 12.3%; 20 Countries Already Use Polymer
