The Reserve Bank of India (RBI) is considering introducing plastic (polymer) notes in the country. The matter was seriously discussed in the recent central bank board meetings held in Patna and Mumbai. This decision is being taken in view of the huge demand for cash in the last few years, the increasing cost of printing paper notes and their rapid spoilage. A pilot project of plastic notes for the general public is expected to start very soon.
Efforts to significantly reduce the cost of printing notes
Data from the Reserve Bank of India’s latest annual report (FY25) show that ₹6,372.8 crore was spent on printing paper notes. This is much higher than the ₹5,101.4 crore spent in the previous financial year. This cost of printing has increased mainly due to the increasing demand for notes. Sources related to this matter say that in the long run, printing of plastic notes is more economical than paper notes. The best part is that our ATMs have now become so modern that they can easily recognize and dispense these polymer notes.
Often, the notes that come into your pocket are dirty or torn. Removing these bad notes is also a big task for RBI. In FY 2025, 23.8 billion bad notes were removed from circulation. This figure is 12.3 percent more than the 21.24 billion notes removed last year. Of these, ₹500 notes had the highest circulation, followed by ₹100 notes. Despite the rise in digital payments across the country, the preference for cash has not diminished. As of May 15, total currency in circulation (CiC) reached a record high of ₹42.86 lakh crore, up 11.5 per cent year-on-year. Given this situation, and keeping in mind that the lifespan of plastic notes is much longer than that of paper notes, the pressure to repeatedly print new notes will be significantly reduced.
Full attention to the increasing demand for small value notes
There is a constant demand for small denomination notes like ₹10 and ₹20 in the market. However, their share in the total currency circulation remains less than one percent. The Central Bank had made many efforts to increase the circulation of coins, but these efforts did not yield the desired results. In 2012, the then government started a field trial by issuing one billion ₹10 plastic notes in five cities. At that time, its purpose was to increase the lifespan of the notes. However, the project came to a halt due to technical issues. Now, a decade later, things have completely changed. There has been a lot of progress in technology, due to which all the previous obstacles have been removed.
This system is running in 60 countries around the world
The idea of plastic notes at the global level is not new. Currently, about 60 countries around the world are using polymer notes. This initiative was started by Australia in 1988 by printing a $10 note. Subsequently, countries ranging from Singapore, Indonesia and Thailand to Malaysia adopted this system. In Europe, Romania was the first country to issue plastic notes in 1998, while Canada introduced them into its currency system in 2011. In contrast, the US dollar is not made entirely of plastic; Rather, it is made from a special blend of cotton and linen.
