RBI weighs shift to plastic currency notes, no final call yet

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, Governor Sanjay Malhotra has said.

Malhotra has 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.

Malhotra acknowledged that recent reports regarding polymer notes contain some truth but clarified that the central bank has not reached any conclusion so far.

“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.

Moreover, the central bank is currently evaluating both the potential advantages and challenges associated with polymer currency before deciding whether to proceed with its introduction.

In addition, the RBI Governor assured that adequate currency is available in the banking system and said the central bank is prepared to respond quickly if localized shortages arise.

“If there is a shortage, we will certainly ensure that the shortage is met,” he said.

Stressing that sufficient currency stock is available for ATMs and bank branches, Malhotra said the RBI would ensure rapid replenishment wherever required.

“Our full effort will be to ensure that wherever there is a shortage of currency in one or two places at ATMs, we will deliver currency there promptly and at a rapid pace,” he added.

The remarks come as the RBI reviews the feasibility of polymer notes while maintaining that adequate cash remains available for distribution across the banking system.