{"id":114843,"date":"2026-07-24T11:36:44","date_gmt":"2026-07-24T06:06:44","guid":{"rendered":"https:\/\/vajiramandravi.com\/current-affairs\/?p=114843"},"modified":"2026-07-24T11:36:44","modified_gmt":"2026-07-24T06:06:44","slug":"indias-shift-towards-polymer-currency","status":"publish","type":"post","link":"https:\/\/vajiramandravi.com\/current-affairs\/indias-shift-towards-polymer-currency\/","title":{"rendered":"India\u2019s Shift Towards Polymer Currency &#8211; Opportunities, Challenges and the Road Ahead"},"content":{"rendered":"<h2 style=\"text-align: justify;\"><b>Polymer Currency Latest News<\/b><\/h2>\n<ul style=\"text-align: justify;\">\n<li style=\"font-weight: 400;\" aria-level=\"1\"><span style=\"font-weight: 400;\">The Reserve Bank of India (RBI), through its currency-printing arm Bharatiya Reserve Bank Note Mudran Pvt. Ltd. (<\/span><b>BRBNMPL<\/b><span style=\"font-weight: 400;\">), has invited global Expressions of Interest (EOI) for supplying Biaxially Oriented Polypropylene (<\/span><b>BOPP<\/b><span style=\"font-weight: 400;\">) polymer substrates with advanced security features.\u00a0<\/span><\/li>\n<li style=\"font-weight: 400;\" aria-level=\"1\"><span style=\"font-weight: 400;\">This marks India&#8217;s most significant move towards introducing polymer (plastic) banknotes since the proposal was first made in <\/span><b>2009<\/b><span style=\"font-weight: 400;\">.<\/span><\/li>\n<\/ul>\n<h2 style=\"text-align: justify;\"><b>Why is RBI Considering Polymer Currency?<\/b><\/h2>\n<ul>\n<li><b>Greater durability:<\/b>\n<ul>\n<li><span style=\"font-weight: 400;\">Polymer notes last 2.5\u20134 times longer than conventional cotton-paper notes.<\/span><\/li>\n<li><span style=\"font-weight: 400;\">Lower denominations such as <\/span><b>\u20b910 <\/b><span style=\"font-weight: 400;\">and <\/span><b>\u20b920<\/b><span style=\"font-weight: 400;\">, which experience the highest circulation and physical wear, are likely to be introduced first.<\/span><\/li>\n<li><span style=\"font-weight: 400;\">Longer lifespan reduces the frequency of replacement under the RBI&#8217;s <\/span><b>Clean Note Policy<\/b><span style=\"font-weight: 400;\">.<\/span><\/li>\n<\/ul>\n<\/li>\n<li><b>Better security against counterfeiting:<\/b>\n<ul>\n<li><span style=\"font-weight: 400;\">Polymer banknotes can incorporate advanced security features such as &#8211;<\/span>\n<ul>\n<li><span style=\"font-weight: 400;\">Transparent windows<\/span><\/li>\n<li><span style=\"font-weight: 400;\">Metallic numerals<\/span><\/li>\n<li><span style=\"font-weight: 400;\">Magnetic pseudo-threads<\/span><\/li>\n<li><span style=\"font-weight: 400;\">Holograms<\/span><\/li>\n<li><span style=\"font-weight: 400;\">Shadow images<\/span><\/li>\n<li><span style=\"font-weight: 400;\">Iridescent patterns<\/span><\/li>\n<li><span style=\"font-weight: 400;\">Durable tactile markings for visually impaired persons<\/span><\/li>\n<\/ul>\n<\/li>\n<li><span style=\"font-weight: 400;\">These features are significantly harder to replicate than those on paper currency.<\/span><\/li>\n<\/ul>\n<\/li>\n<li><b>Improved currency management: <\/b><span style=\"font-weight: 400;\">Although manufacturing costs are higher initially, fewer replacement cycles can reduce printing expenditure, transportation costs, storage and logistics costs, and destruction of <\/span><b>soiled <\/b><span style=\"font-weight: 400;\">notes.<\/span><\/li>\n<\/ul>\n<h2 style=\"text-align: justify;\"><b>Economic Rationale<\/b><\/h2>\n<ul>\n<li><b>Current cost of currency management:<\/b>\n<ul>\n<li><span style=\"font-weight: 400;\">RBI spends roughly <\/span><b>\u20b95,000 crore<\/b><span style=\"font-weight: 400;\"> annually on printing and maintaining currency.<\/span><\/li>\n<li><span style=\"font-weight: 400;\">Security printing expenditure &#8211; \u20b95,101 crore (FY2023-24), \u20b96,373 crore (FY2024-25), and \u20b94,875 crore (FY2025-26).<\/span><\/li>\n<li><span style=\"font-weight: 400;\">India destroys 20\u201324 billion soiled notes annually, largely lower denominations.<\/span><\/li>\n<\/ul>\n<\/li>\n<li><b>Cost challenges:<\/b>\n<ul>\n<li><span style=\"font-weight: 400;\">Polymer notes cost 30\u201360% more to manufacture than paper notes.<\/span><\/li>\n<li><span style=\"font-weight: 400;\">In several countries, production cost for low-value polymer notes has reached 20\u201324% of their face value.<\/span><\/li>\n<li><span style=\"font-weight: 400;\">Additional transition costs include <\/span><b>recalibration <\/b><span style=\"font-weight: 400;\">of ATMs, currency sorting machines, vending machines, and cash-processing infrastructure.<\/span><\/li>\n<\/ul>\n<\/li>\n<\/ul>\n<h2 style=\"text-align: justify;\"><b>Environmental Dimensions<\/b><\/h2>\n<ul>\n<li><b>Potential benefits: <\/b><span style=\"font-weight: 400;\">A TERI study commissioned by RBI found that &#8211;<\/span>\n<ul>\n<li><span style=\"font-weight: 400;\">Longer circulation life reduces manufacturing and transportation requirements.<\/span><\/li>\n<li><span style=\"font-weight: 400;\">Over the complete lifecycle, polymer notes may have a lower overall <\/span><b>carbon footprint <\/b><span style=\"font-weight: 400;\">than paper notes.<\/span><\/li>\n<li><span style=\"font-weight: 400;\">End-of-life polymer notes can be <\/span><b>recycled <\/b><span style=\"font-weight: 400;\">into plastic products.<\/span><\/li>\n<\/ul>\n<\/li>\n<li><b>Concerns:<\/b>\n<ul>\n<li><span style=\"font-weight: 400;\">Polymer is produced from polypropylene, a <\/span><b>petroleum<\/b><span style=\"font-weight: 400;\">&#8211;<\/span><b>based<\/b><span style=\"font-weight: 400;\"> product.<\/span><\/li>\n<li><span style=\"font-weight: 400;\">Higher initial carbon footprint.<\/span><\/li>\n<li><span style=\"font-weight: 400;\">Need for specialised recycling facilities.<\/span><\/li>\n<li><span style=\"font-weight: 400;\">Dependence on fossil fuel-derived raw materials raises sustainability concerns.<\/span><\/li>\n<\/ul>\n<\/li>\n<\/ul>\n<h2 style=\"text-align: justify;\"><b>Unanswered Questions<\/b><\/h2>\n<ul>\n<li><b>Dependence on petrochemical imports:<\/b>\n<ul>\n<li><span style=\"font-weight: 400;\">Polymer substrate is made from BOPP (Biaxially Oriented Polypropylene).<\/span><\/li>\n<li><span style=\"font-weight: 400;\">India <\/span><b>imports <\/b><span style=\"font-weight: 400;\">around one-fifth of its polypropylene requirement.<\/span><\/li>\n<li><span style=\"font-weight: 400;\">Volatility in crude oil prices, aggravated by geopolitical tensions (especially West Asia), could increase manufacturing costs.<\/span><\/li>\n<li><span style=\"font-weight: 400;\">This is despite planned domestic capacity expansion by companies such as Reliance Industries and Indian Oil Corporation.<\/span><\/li>\n<\/ul>\n<\/li>\n<li><b>Relevance in an increasingly digital economy:<\/b>\n<ul>\n<li><span style=\"font-weight: 400;\">India&#8217;s payment ecosystem presents a paradox &#8211; <\/span><b>UPI <\/b><span style=\"font-weight: 400;\">processes over 24,000 crore transactions annually, accounting for nearly <\/span><b>85%<\/b><span style=\"font-weight: 400;\"> of retail digital payments.<\/span><\/li>\n<li><span style=\"font-weight: 400;\">Yet, currency in circulation has exceeded \u20b941 lakh crore (2025\u201326), compared to around \u20b916\u201317 lakh crore a decade earlier.<\/span><\/li>\n<li><span style=\"font-weight: 400;\">The <\/span><b>Currency-to-GDP ratio<\/b><span style=\"font-weight: 400;\"> remains above 11%, indicating sustained demand for cash despite rapid digitalisation.<\/span><\/li>\n<li><b>Reasons for continued cash demand: <\/b><span style=\"font-weight: 400;\">Large informal economy, limited digital infrastructure in rural areas, and cash remains essential for financial inclusion and small-value transactions.<\/span><\/li>\n<\/ul>\n<\/li>\n<\/ul>\n<h2 style=\"text-align: justify;\"><b>Historical Evolution and Global Experience<\/b><\/h2>\n<ul>\n<li><b>Evolution:<\/b>\n<ul>\n<li><b>2009<\/b><span style=\"font-weight: 400;\">: RBI first proposed polymer \u20b910 notes.<\/span><\/li>\n<li><b>2012<\/b><span style=\"font-weight: 400;\">:\u00a0<\/span>\n<ul>\n<li><span style=\"font-weight: 400;\">Pilot planned in Kochi, Mysuru, Jaipur, Bhubaneswar and Shimla to test diverse climatic conditions.<\/span><\/li>\n<li><span style=\"font-weight: 400;\">The project was later shelved due to technological challenges and the disruption caused by 2016 <\/span><b>demonetisation <\/b><span style=\"font-weight: 400;\">and subsequent currency redesign.<\/span><\/li>\n<\/ul>\n<\/li>\n<li><b>2026<\/b><span style=\"font-weight: 400;\">: BRBNMPL&#8217;s global EOI revives the proposal, with field trials expected to begin for \u20b910 and \u20b920 notes.<\/span><\/li>\n<\/ul>\n<\/li>\n<li><b>Global experience:<\/b>\n<ul>\n<li><b>Australia <\/b><span style=\"font-weight: 400;\">pioneered polymer currency and has fully transitioned to it.\u00a0<\/span><\/li>\n<li><span style=\"font-weight: 400;\">Around <\/span><b>60 <\/b><span style=\"font-weight: 400;\">countries now use polymer banknotes in some form, including <\/span><b>Canada<\/b><span style=\"font-weight: 400;\">, United Kingdom, New Zealand, Mexico, Brazil, Saudi Arabia, Romania, and Barbados.<\/span><\/li>\n<li><span style=\"font-weight: 400;\">Their experience indicates improved <\/span><b>durability<\/b><span style=\"font-weight: 400;\">, enhanced <\/span><b>security <\/b><span style=\"font-weight: 400;\">and lower lifecycle <\/span><b>costs <\/b><span style=\"font-weight: 400;\">despite higher initial production expenses.<\/span><\/li>\n<\/ul>\n<\/li>\n<\/ul>\n<h2 style=\"text-align: justify;\"><b>Way Forward<\/b><\/h2>\n<ul style=\"text-align: justify;\">\n<li style=\"font-weight: 400;\" aria-level=\"1\"><span style=\"font-weight: 400;\">Begin with <\/span><b>limited <\/b><span style=\"font-weight: 400;\">pilot projects in lower denominations before nationwide adoption.<\/span><\/li>\n<li style=\"font-weight: 400;\" aria-level=\"1\"><span style=\"font-weight: 400;\">Encourage <\/span><b>domestic production <\/b><span style=\"font-weight: 400;\">of polymer substrates to reduce import dependence.<\/span><\/li>\n<li style=\"font-weight: 400;\" aria-level=\"1\"><span style=\"font-weight: 400;\">Conduct comprehensive cost-benefit and environmental impact assessments (<\/span><b>EIAs<\/b><span style=\"font-weight: 400;\">).<\/span><\/li>\n<li style=\"font-weight: 400;\" aria-level=\"1\"><span style=\"font-weight: 400;\">Upgrade ATM and cash-handling infrastructure in a phased manner.<\/span><\/li>\n<li style=\"font-weight: 400;\" aria-level=\"1\"><span style=\"font-weight: 400;\">Ensure <\/span><b>coexistence <\/b><span style=\"font-weight: 400;\">of paper and polymer notes during transition without demonetisation.<\/span><\/li>\n<li style=\"font-weight: 400;\" aria-level=\"1\"><b>Align <\/b><span style=\"font-weight: 400;\">currency reforms with India&#8217;s broader objectives of Digital India, financial inclusion, and efficient cash management.<\/span><\/li>\n<\/ul>\n<h2 style=\"text-align: justify;\"><b>Conclusion<\/b><\/h2>\n<ul style=\"text-align: justify;\">\n<li style=\"font-weight: 400;\" aria-level=\"1\"><span style=\"font-weight: 400;\">India&#8217;s move towards polymer currency represents an attempt to <\/span><b>modernise <\/b><span style=\"font-weight: 400;\">its cash ecosystem by improving durability, security and lifecycle efficiency. However, concerns warrant a cautious, <\/span><b>evidence-based rollout<\/b><span style=\"font-weight: 400;\">.\u00a0<\/span><\/li>\n<li style=\"font-weight: 400;\" aria-level=\"1\"><span style=\"font-weight: 400;\">The objective should not be merely replacing paper with plastic, but creating a cost-effective, secure and sustainable currency system suited to India&#8217;s evolving payment landscape.<\/span><\/li>\n<\/ul>\n<p style=\"text-align: justify;\"><b>Source: <\/b><a href=\"https:\/\/indianexpress.com\/article\/explained\/explained-economics\/rbi-plastic-currency-notes-polymer-trial-explained-10798966\/\" target=\"_blank\" rel=\"nofollow noopener\"><b>IE<\/b><\/a><b> |\u00a0<\/b><a href=\"https:\/\/www.pressreader.com\/foryou?popupArticleId=282132118219797\" target=\"_blank\" rel=\"nofollow noopener\"><b>TH<\/b><\/a><\/p>\n","protected":false},"excerpt":{"rendered":"<p>The RBI, through its currency-printing arm BRBNMPL, has invited global Expressions of Interest (EOI) for supplying Biaxially Oriented Polypropylene (BOPP) polymer substrates with advanced security features. <\/p>\n","protected":false},"author":19,"featured_media":114869,"comment_status":"closed","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"_acf_changed":false,"footnotes":""},"categories":[18],"tags":[8917,287,59],"class_list":["post-114843","post","type-post","status-publish","format-standard","has-post-thumbnail","category-upsc-mains-current-affairs","tag-indias-shift-towards-polymer-currency","tag-mains-article","tag-upsc-mains-current-affairs-tag","no-featured-image-padding"],"acf":[],"_links":{"self":[{"href":"https:\/\/vajiramandravi.com\/current-affairs\/wp-json\/wp\/v2\/posts\/114843","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/vajiramandravi.com\/current-affairs\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/vajiramandravi.com\/current-affairs\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/vajiramandravi.com\/current-affairs\/wp-json\/wp\/v2\/users\/19"}],"replies":[{"embeddable":true,"href":"https:\/\/vajiramandravi.com\/current-affairs\/wp-json\/wp\/v2\/comments?post=114843"}],"version-history":[{"count":4,"href":"https:\/\/vajiramandravi.com\/current-affairs\/wp-json\/wp\/v2\/posts\/114843\/revisions"}],"predecessor-version":[{"id":114885,"href":"https:\/\/vajiramandravi.com\/current-affairs\/wp-json\/wp\/v2\/posts\/114843\/revisions\/114885"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/vajiramandravi.com\/current-affairs\/wp-json\/wp\/v2\/media\/114869"}],"wp:attachment":[{"href":"https:\/\/vajiramandravi.com\/current-affairs\/wp-json\/wp\/v2\/media?parent=114843"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/vajiramandravi.com\/current-affairs\/wp-json\/wp\/v2\/categories?post=114843"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/vajiramandravi.com\/current-affairs\/wp-json\/wp\/v2\/tags?post=114843"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}