India is moving ahead with its agenda to introduce polymer currency as the RBI printing subsidiary has invited domestic and global manufacturers. At first, RBI may introduce lower denomination notes of Rs 10 and 20. Bharatiya Reserve Bank Note Mudran has issued an Expression of Interest asking suppliers of opacified polymer substrate sheets that offer advanced security features.
This move will pave the way for India's first polymer currency. Polymer currency is made of a special plastic substrate that was first introduced in Australia and later adopted by Singapore, Canada, the UK, and New Zealand. Polymer currency is more durable compared to traditional cotton-based paper notes.
Why RBI Is Considering Polymer Bank Notes?
One of the major reasons for the adoption of polymer notes is due to their frequent handling and the climatic conditions of India. Nearly two lakh banknotes are damaged and destroyed yearly. Rs 100 and Rs 500 banknotes are removed from circulation every year. Polymer currency offers advanced safety features like colour-shifting elements and transparent windows that are more difficult to replicate. According to data from the RBI, there is a spike in fake high-denomination banknotes identified in recent years, mostly Rs 500 notes. Australia switched to polymer currency in the mid-1990s and said that these polymer notes are difficult to counterfeit.
RBI Governor Sanjay Malhotra said that the Reserve Bank of India was examining the possibility of introducing polymer currency, and it is under consideration. Global uncertainty and inflation, interest rates, the RBI governor also announced that the repo rates remain unchanged due to Middle-East concerns.
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