Winning Bizness Desk

Mumbai.The Reserve Bank of India (RBI) is preparing to introduce plastic, or polymer, banknotes in the country through a pilot project that is expected to begin with ₹10 and ₹20 notes. The move marks the next step in India's plan to modernize its currency system with more durable and secure banknotes. According to media reports and official sources, the trial will help the central bank assess the performance of polymer notes before taking a decision on a nationwide rollout. If the pilot delivers the desired results, India could witness a full-scale launch of polymer currency from 2027.

Pilot to begin with smaller denominations

The RBI has decided to start the experiment with low-value currency notes as these circulate the most and wear out quickly. Officials believe that testing polymer notes in the ₹10 and ₹20 denominations will provide valuable feedback on durability, public acceptance and operational efficiency. Based on the findings of the pilot, the central bank will decide whether the technology should be expanded to other denominations.

The key features of the pilot include:

• Initial testing with ₹10 and ₹20 banknotes.
• Trial results will determine the future roadmap.
• Full-scale rollout is expected only after successful evaluation.
• A wider launch is likely from 2027 if the project meets expectations.

Paper and polymer notes to circulate together

The introduction of polymer currency will not mean the immediate withdrawal of existing paper notes. The RBI is expected to follow a gradual transition strategy to ensure there is no disruption in the country's cash economy. Both paper and polymer notes will remain legal tender and circulate simultaneously for a considerable period until the new currency becomes well established.

The transition plan is expected to include:

• Co-existence of paper and polymer notes in the market.
• Gradual replacement rather than an overnight switch.
• Existing paper notes will continue to remain valid during the transition.
• The pace of expansion will depend on the outcome of the pilot project.

Global tender issued for polymer substrate

Preparations for the project gathered pace after the RBI's note-printing unit floated a global Expression of Interest (EOI) seeking manufacturers capable of supplying specialised polymer substrate sheets. These sheets serve as the base material on which polymer banknotes are printed and are designed to support advanced security features.

According to the tender documents, experienced manufacturers from around the world have been invited to submit proposals for manufacturing and supplying polymer substrates equipped with high-end security technology. The deadline for submitting bids has been fixed as August 18. The EOI is intended to identify qualified global suppliers with the technical capability to meet the RBI's standards for quality, security and production.

Longer life and stronger security features

Polymer banknotes offer several advantages over conventional paper currency. They are far more resistant to water, dust and dirt and do not tear easily, allowing them to remain in circulation much longer. Their improved durability reduces the need for frequent replacement, potentially lowering printing and currency management costs over time.

Another major advantage is their ability to incorporate sophisticated security features that are difficult to replicate. Transparent windows, advanced printing technologies and embedded security elements make polymer notes significantly harder to counterfeit, strengthening the integrity of the currency system and enhancing public confidence.

Many countries already use polymer currency

Polymer banknotes have already become a standard feature in several countries, including Australia, Canada, the United Kingdom and New Zealand. These nations adopted polymer currency primarily because of its longer lifespan, better hygiene and stronger anti-counterfeiting capabilities. The RBI has also expressed interest in polymer notes on earlier occasions as part of efforts to improve the quality and life of Indian banknotes.

For readers, two terms are important:

• Polymer banknotes are printed on a special plastic-based substrate instead of paper, making them highly durable and water-resistant.
• An Expression of Interest (EOI) is a global tender process through which qualified companies are invited to showcase their technical expertise and submit proposals for a project.

Although the RBI is yet to issue an official public statement on the pilot, the issuance of the global tender indicates that groundwork for India's first polymer currency trial is now underway. If the experiment proves successful, the country could begin a gradual transition to a new generation of safer, stronger and longer-lasting banknotes from 2027.