Reserve Bank of India
The Reserve Bank of India is preparing to make a pilot project for circulating plastic notes. If this is successful then plastic notes can be introduced in the country, but in the meantime the issue has also been raised that in which countries these polymer notes are valid and where they are considered to be the strongest. The measure of strength here is the quality and durability of the note. Although these notes are circulated in more than 60 countries, they were first introduced in Australia and the notes there are also said to be the strongest.
Australia is often considered to be the strongest and most successful system in terms of plastic money i.e. polymer bank notes. Australia issued the world’s first polymer note in 1988 and today almost all its notes are completely plastic based. According to the Reserve Bank of Australia, between 1992–1996 it converted its entire banknote series to polymer, becoming the world’s first fully polymer currency system. It is very difficult to convert Australia’s polymer notes into counterfeit notes. Notes remain safer from water, dust and tearing. Lasts long even in hot and humid weather. The notes have transparent windows, micro printing and special security features. According to the report, notes last for an average of 10 to 15 years.
After this, Canada is also considered far ahead in the matter of plastic notes. Canada switched the entire series to polymer in 2011 and the notes there are famous for their state-of-the-art security features. At the time of the introduction of the notes, the Bank of Canada had said that these notes would be more secure, durable and difficult to counterfeit and would last 2.5 times longer than paper notes. At the same time, UK had also described plastic notes as cleaner, safer and more durable. If we talk about Asia, the polymer notes of Singapore and Malaysia are also considered very strong and high-tech. Romania was the first country in Europe to adopt plastic notes on a large scale.
Why does RBI want to introduce plastic notes?
RBI wants to move towards plastic i.e. polymer notes because the expenditure on printing and maintenance of paper notes is continuously increasing. According to the FY25 annual report of the Reserve Bank of India, the expense of printing notes increased to Rs 6,372.8 crore, which is much higher than Rs 5,101.4 crore in the previous financial year. According to media reports, polymer notes are expensive in the beginning, but their lifespan is many times longer than paper notes. In such a situation, in the long run the need for repeatedly printing new notes will be reduced and there can be huge savings in costs. Also, now the country’s ATMs and cash handling systems have become so modern that they can easily recognize and process plastic notes.
Actually, the biggest challenge before RBI is to replace the damaged and torn notes. About 23.8 billion bad notes were taken out of circulation in FY25, which is 12.3 percent more than last year. The maximum among these were notes of Rs 500. Despite the rapid increase in digital payments, the demand for cash in the country is continuously increasing and as of May 15, the total currency in circulation reached a record level of Rs 42.86 lakh crore. In such a situation, polymer notes, being more durable, will not get spoiled quickly, due to which the pressure of changing and reprinting notes can be reduced to a great extent.
Also read- Now Indian notes will be made of plastic! RBI is considering introducing polymer currency
