RBI takes first formal step towards introducing polymer banknotes in India

India has taken its first formal step towards introducing polymer banknotes, with the Reserve Bank of India's currency printing arm inviting global Expressions of Interest (EoIs) for the supply of polymer substrate sheets embedded with security features, as per multiple reports.

Bharatiya Reserve Bank Note Mudran Private Limited (BRBNMPL) has invited eligible domestic and international manufacturers to submit bids by August 18 for manufacturing opacified polymer substrate sheets for banknote printing.

However, the tender does not specify the denominations proposed for polymer notes or a timeline for their rollout, the reports said.

If adopted, polymer banknotes would mark a major shift for India, where currency has been printed on specialised paper for nearly a century.

Polymer notes -- made from durable plastic films -- are generally more resistant to wear and tear and have a longer lifespan than conventional paper currency.

Reports claim that the tender prescribes stringent national security conditions for prospective suppliers.

Moreover, bidders will be required to obtain security clearance from the government, isolate any operations in China or Pakistan from the India contract, refrain from sourcing raw materials for India's banknote substrate from the two countries and undertake not to supply India-specific substrate to any third country.

Earlier in June, Governor Sanjay Malhotra said that the Reserve Bank of India (RBI) is examining a proposal to introduce polymer or plastic currency notes, although no final decision has been taken yet.

“We are examining the pros and cons of it and whether it would be worthwhile to implement. It is still at a preliminary stage,” he said.

Malhotra had said that the proposal remains under consideration and is still at a preliminary stage.

He stated that as far as polymer notes are concerned, the proposal is under consideration, adding that as soon as any decision is taken on it, we will inform you.

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