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NEW DELHI: India could soon move closer to introducing polymer, or plastic, currency notes after reports said the Reserve Bank of India (RBI) has revived discussions on a long-pending proposal to issue more durable banknotes.
According to multiple media reports citing sources familiar with the matter, the proposal was discussed at recent RBI board meetings. A pilot project could be considered before any wider rollout across the country.
The move comes at a time when demand for physical cash continues to rise despite the rapid growth of digital payments in India. According to media reports citing RBI data, currency in circulation grew by about 11.5 percent year-on-year, contributing to higher currency printing and replacement costs.
According to the RBI’s FY26 annual report, expenditure on printing currency notes rose to ₹6,372.8 crore from ₹5,101.4 crore in the previous financial year. Reports suggest rising currency management costs are among the factors behind the renewed interest in longer-lasting polymer notes.
Polymer notes are made from a special type of plastic substrate instead of cotton-based paper. Polymer notes generally last longer than conventional paper-based banknotes and can reduce the frequency of note replacement, according to central banks that have adopted the technology. They are also more resistant to moisture and dirt and can incorporate advanced security features.
According to reports by Moneycontrol and Business Standard, RBI officials are evaluating polymer notes primarily because of their longer shelf life and potential to lower long-term currency management costs. The reports also suggest that a pilot rollout could be announced in the future.
The idea is not new for India. The RBI has been studying polymer currency for more than two decades. In 2012, the government approved a field trial of ₹10 polymer banknotes in five cities including Kochi, Mysuru, Jaipur, Bhubaneswar and Shimla. However, the initiative did not progress to large-scale circulation.
Official records show that the RBI has repeatedly examined polymer currency as a way to increase the lifespan of frequently used banknotes, especially lower denominations that wear out quickly.
Recent reports suggest the RBI’s renewed interest is primarily driven by the need for longer-lasting banknotes and lower lifecycle costs, while polymer notes also offer enhanced security features.
Globally, polymer banknotes are already used in several countries, including Australia, Canada, the United Kingdom, New Zealand and Romania. Australia became the first country to fully adopt polymer currency, citing benefits such as durability, security and lower replacement requirements.
Separate reports suggest the RBI is also examining varnished banknotes, which can improve durability and security while retaining the existing paper-based currency system.
While no official announcement has yet been made regarding a nationwide transition to polymer currency, the revival of the proposal signals that the central bank is actively exploring new ways to modernise India’s cash ecosystem.
For now, paper currency remains the standard across the country. If the proposal moves forward, any transition to polymer notes would likely begin with pilot testing before a decision is taken on wider circulation.
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