The discussion regarding issuing plastic notes has intensified in India. It has been claimed in many news that plastic notes may soon come into use in India. It has been said in the report of Business Standard that in view of the increasing demand for polymer notes in India, the Reserve Bank of India (RBI) has also started work on it. RBI is discussing to introduce polymer notes in India.
Why will these notes be better than paper notes?
The report quoted sources as saying that the proposal to introduce polymer or plastic notes was discussed in the last two board meetings of RBI held in Patna and Mumbai. It is being said that these notes can be prepared at less cost than paper notes and their life can also be longer and safer. For this reason, consideration is being given to bringing this note into circulation.
Apart from reducing the cost, these notes will also be supportive of ATM machines. Meaning ATM machines will be capable of issuing polymer based notes. Sources said that RBI has the resources to do this. Business Standard reported that the central bank is also planning a pilot project for polymer notes, which may be announced in the near future.
Why the demand to replace paper notes?
RBI’s annual report for financial year 2025 has revealed that the expenditure on printing of paper notes has increased from Rs 5,101.4 crore in the previous financial year to Rs 6,372.8 crore. Business Standard reported that this increase was mainly due to the increasing demand for printing of notes.
Additionally, approximately 23.8 billion soiled notes were withdrawn during FY 2025, which is 12.3 percent more than 21.24 billion notes last year. The highest number of notes removed were Rs 500 and then Rs 100.
According to the report, as of May 15, the currency in circulation has increased by 11.5 percent on an annual basis and reached a record Rs 42.86 trillion. Shows continued demand for cash despite continued growth in digital payments. The currency in circulation has increased by Rs 1.15 trillion in the first one and a half months of FY 2027.
What is the claim in the report regarding the coins?
RBI’s efforts to increase the use of coins have not yielded the expected results. The supply of coins increased from approximately 1.2 billion coins in FY 2024 to 1.5 billion coins in FY 2025. Of these, about 80 crore coins were of Rs 5, while after that there were about 4 crore coins of Rs 20.
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