New Delhi: India has taken its first formal step towards the possible introduction of polymer banknotes, with the Reserve Bank of India’s (RBI) currency printing arm inviting global Expressions of Interest (EoIs) for the supply of specialised polymer substrate sheets embedded with advanced security features.
According to reports, Bharatiya Reserve Bank Note Mudran Private Limited (BRBNMPL) has invited eligible domestic and international manufacturers to submit bids by August 18 for the production of opacified polymer substrate sheets that could be used for printing banknotes.
The tender marks the first official move towards polymer-based currency, although it does not specify which denominations may be introduced or provide a timeline for the rollout.
If implemented, polymer banknotes would represent a significant shift in India’s currency system, where banknotes have traditionally been printed on specialised paper for nearly a century.
Why Polymer Banknotes?
Polymer banknotes are manufactured using durable plastic films rather than paper, offering several advantages over conventional currency. They are more resistant to moisture, dirt, folding, and tearing, making them significantly more durable. Their longer lifespan can also reduce replacement costs over time.
In addition, polymer notes allow for the incorporation of sophisticated security features, making them more difficult to counterfeit.
Strict Security Conditions for Suppliers
The tender reportedly includes stringent national security requirements for companies seeking to supply polymer substrates.
Prospective bidders must obtain security clearance from the Government of India and comply with several conditions, including:
- Isolating any operations in China or Pakistan from the India contract.
- Not sourcing raw materials for India’s banknote substrate from China or Pakistan.
- Providing an undertaking that India-specific polymer substrate will not be supplied to any third country.
These conditions are aimed at safeguarding the integrity and security of India’s currency production process.
RBI Yet to Take Final Decision
Despite the tender process, the RBI has clarified that no final decision has been taken on introducing polymer banknotes.
In June, RBI Governor Sanjay Malhotra said the central bank was evaluating the advantages and disadvantages of polymer currency before taking a decision.
“We are examining the pros and cons of it and whether it would be worthwhile to implement. It is still at a preliminary stage,” Malhotra had said.
He reiterated that the proposal remains under consideration and that the RBI would announce its decision once the evaluation process is complete.
While the latest tender signals progress towards adopting polymer currency, the introduction of plastic banknotes in India will depend on the outcome of the RBI’s ongoing assessment and subsequent policy decisions.
