RBI Governor Sanjay Malhotra said polymer banknotes could enter circulation at the beginning of the next financial year if the rollout proceeds according to plan, highlighting their significantly longer lifespan compared with conventional paper notes.
The Reserve Bank of India (RBI) is targeting the introduction of polymer banknotes from the beginning of the next financial year, Governor Sanjay Malhotra said, marking a potential shift in the material used for India’s currency notes.
“We are targeting that they are in circulation, if everything goes as per plan, at the beginning of the next financial year,” Malhotra said while responding to a question on polymer notes.
One of the biggest advantages of polymer currency is its durability. According to the RBI governor, polymer notes can have a lifespan up to four times that of banknotes made using paper substrate.
Malhotra pointed out that polymer banknotes are not a new experiment globally and have been used in several countries for decades.
“Polymer notes have been in circulation for more than 30 years in various countries, and their life is much more — up to four times the life of the paper substrate,” the Governor said.
Why polymer notes matter
Polymer banknotes are made using a synthetic polymer substrate rather than the cotton-based paper traditionally used for currency. Their greater durability means notes potentially need to be replaced less frequently, particularly denominations that undergo heavy circulation and consequently suffer greater wear and tear.
More from BusinessA longer lifespan could also potentially lower the frequency with which damaged or soiled currency needs to be withdrawn and replaced.
Several countries have already moved towards polymer currency, either across their entire banknote series or for selected denominations. The experience of these countries provides the RBI with an established international precedent as it prepares for a possible rollout in India.
The Governor’s comments provide a clearer timeline for the RBI’s polymer currency plans, with the central bank now targeting the beginning of FY28 for notes to enter circulation, subject to preparations proceeding according to plan.
The transition would represent a significant change in India’s banknote ecosystem. The RBI, however, has not indicated in the remarks which denominations would be introduced in polymer first or the scale of the initial circulation.
