Polymer Currency Notes: Is the Government of India considering phasing out paper currency notes? Many people are wondering about this, as the topic is being discussed on social media. The Reserve Bank of India (RBI) appears to be considering the introduction of polymer—or plastic-based—currency across the country once again.
This information is not mere speculation; it was shared by RBI Governor Sanjay Malhotra himself. He stated that the proposal is currently in its initial stages. Unlike traditional paper notes, these notes are manufactured using a special type of plastic known as polymer.
These notes are considered more durable, secure, and long-lasting. They are less affected by water and moisture. If polymer notes are introduced, the worry about them getting wet during the rainy season will be eliminated.
Here is what the Governor said
RBI Governor Sanjay Malhotra stated that the proposal is in its early stages and the RBI is assessing its potential benefits and challenges. Following the announcement of the monetary policy, Governor Malhotra confirmed that the proposal for polymer currency notes is under consideration.
“We are examining the pros and cons and evaluating whether its implementation would be beneficial. It is currently in the initial stage.” The polymer option is being actively considered due to the high cost of printing paper notes and the increasing volume of currency that becomes unusable.
Discussions about introducing such currency notes took place a decade ago as well. In February 2014, the Central Government informed Parliament that one billion polymer ₹10 notes would be issued on a trial basis in five cities selected based on geographical and climatic diversity: Kochi, Mysuru, Jaipur, Shimla, and Bhubaneswar. However, the initiative was subsequently halted due to technical and operational challenges.
Repo Rate Unchanged
As expected, the Reserve Bank of India has made no changes to the repo rate. The Reserve Bank of India has kept the repo rate unchanged at 5.25 per cent. Taking current conditions into account, the central bank has lowered its economic growth projection for the current financial year to 6.6 per cent and raised the retail inflation forecast to 5 per cent.
