RBI Plastic Note: Big news for common people. The Reserve Bank of India (RBI) is getting ready to introduce polymer banknotes in India as part of a pilot project. The government has approved field trials for 100 million polymer notes in denominations of ₹10 and ₹20, which will coexist with the current paper notes without replacing them. Successful implementation of this project could lead to the transition of larger denominations like ₹100 and ₹500 to polymer notes in the future. The RBI’s decision to start with ₹10 and ₹20 notes for the trial is based on the following reasons:
1. Economic and Technical Considerations
High circulation but low value: ₹10 and ₹20 notes make up 25% of the total currency count but only 1.4% of the total currency value. Any technical issues during the trial will have minimal impact on the economy or financial system.
Polymer notes have different characteristics compared to paper notes, requiring ATM recalibration.
As ₹10 and ₹20 notes are predominantly exchanged at banks and local markets rather than ATMs, starting with them allows the RBI to assess polymer notes’ quality without affecting ATM infrastructure. Frequent usage of ₹10 and ₹20 notes in daily transactions leads to quick wear and tear. Polymer notes are durable and last longer than paper notes, reducing the need for reprinting.
Although initial printing costs are higher, the long-term savings from reduced replacement and printing expenses will be substantial.
Security Features: The RBI will evaluate the effectiveness of the polymer notes’ security features against counterfeiting.
Public Acceptance: Testing will determine how well the polymer notes withstand Indian weather conditions and public usage patterns.
When will these polymer notes come into the market?
This is currently a trial or pilot project. The RBI’s note-printing unit has issued a global tender for the supply of polymer substrate sheets, with August 18th set as the deadline for submitting bids.
These notes will be released into the market in phases only after the tender process is completed, the raw materials are procured, and printing is complete. If this trial is successful, more notes will be printed in polymer in the future.