Why In News?

The Reserve Bank of India (RBI) invited global bids to supply special plastic sheets to start a pilot project for printing Rs 10 and Rs 20 polymer banknotes.

What are Polymer (Plastic) Currency Notes?

They are made from a flexible, synthetic plastic material called Biaxially Oriented Polypropylene (BOPP). Unlike traditional Indian notes made from a blend of cotton and linen, these plastic notes feature smooth, non-porous surfaces.

Australia became the first country to invent and use polymer notes in 1988. Today, more than 60 countries, including Canada, the UK, New Zealand, and Romania, use polymer notes.

Recyclable Material: When plastic notes get old, factories shred them into tiny pellets and recycle them to make new plastic items like garden furniture and compost bins.

Integrated Security: The plastic material allows note-makers to build transparent windows directly into the note, which ordinary printers cannot copy.

Why is RBI Considering Polymer Notes?

Longer Lifespan

Polymer notes survive 2.5 to 4 times longer than normal paper notes. They easily survive rough handling by the public.

Better Security

Polymer notes stop criminals from making fake money. They include high-tech security features like 3D holograms and color-changing inks embedded inside the plastic film.

Reduced Currency Replacement Costs

The RBI spends a huge amount of money printing new notes every year. In the financial year 2024-25, the RBI spent Rs 6,372.8 crore just on printing currency. Plastic notes stay in the market longer, which cuts down these high printing bills.

Improved Resistance

Plastic notes do not absorb water, sweat, or oil. If you accidentally wash them in a washing machine, they do not tear or melt.

Record High Cash Demand

Even with UPI digital payments, Indians use a lot of cash. India’s Currency in Circulation (CiC) has more than doubled, surging from ₹17.74 trillion just before the November 2016 demonetisation to an all-time high of ₹42.86 trillion in May 2026. 

Too Many Dirty Notes

India destroys billions of dirty and torn notes every year. The RBI threw away 23.8 billion pieces of soiled notes in 2024-25 alone.