RBI Plans Polymer Rupee Notes Pilot
The Reserve Bank of India is set to revive plans for polymer rupee notes as currency demand rises, with a pilot project expected to test plastic banknotes for public circulation.
RBI Polymer Rupee Notes Plan
The RBI is considering polymer-based banknotes because they are expected to last longer than paper notes and reduce replacement costs over time. Officials believe such notes may offer clear advantages in production cost, durability and circulation management.
The central bank is also expected to ensure that ATMs are equipped to dispense polymer notes before wider rollout. The pilot will help assess public use, machine compatibility and the practical challenges of introducing plastic currency in India.
Rising Currency Demand Drives Move
The renewed push comes as demand for physical currency has increased despite rapid growth in digital payments. India’s currency-to-GDP ratio rose to 12.1% in FY26 from 11.7% in FY25, reflecting continued reliance on cash.
An RBI survey found strong preference for cash among individuals and small merchants. This has made currency durability and supply management important concerns for the central bank.
Polymer Notes May Improve Durability
Polymer notes are used in several countries because they are more resistant to wear, moisture and damage compared to paper currency. They can also include advanced security features to make counterfeiting harder.
India has considered polymer notes in the past, but the proposal did not move into large-scale circulation. The expected pilot will test whether polymer rupee notes can become a practical part of India’s future currency system.
