It’s a revamp! RBI steps ahead on plan for plastic rupee notes
If introduced, it would be a first for the country, where the Reserve Bank of India has relied on special paper to print money for almost a century.
Bharatiya Reserve Bank Note Mudran (BRBNMPL) has invited eligible domestic and international manufacturers to submit bids by August 18.
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It is looking for suppliers who can produce opacified polymer substrate sheets with suitable security features for banknotes.
However, the Expression of Intent does not specify denominations intended to be printed using the material or timelines for introducing polymer banknotes.
The tender imposes strict national security conditions. Bidders must obtain security clearance from the government, ring-fence any operations in China or Pakistan under the India contract, refrain from sourcing raw materials from either country for the India-specific banknote substrate, and undertake not to supply the India-specific substrate to any third country. To qualify, bidders must have provided polymer banknote substrates with security features to central banks or banknote printing companies for at least the last three years.
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Field Trials
They must also demonstrate the capacity to supply at least 20,400 guns or 30% of the gauge requirement. Although the initial requirement was for 68,000 guns (about 34,000 guns each for two denominations), BRBNMPL said this was for immediate needs only and larger supplies could follow after successful field trials.
Last month, RBI governor Sanjay Malhotra said Mint Road was exploring the possibility of introducing polymer banknotes but talks were still in the early stages. Polymer banknotes made from durable plastic films generally last longer than paper notes and need to be replaced less frequently because they are more resistant to wear and tear.
This move comes despite the RBI’s spending on money printing has reduced.
According to the RBI’s annual report, banknote printing costs fell by almost a quarter in 2025-26 compared to the previous year, falling to ₹4,875 crore; This turned out to be largely due to lower printing requirements.
The decline in printing costs came despite the value of currency in circulation rising 12% to ₹41.23 lakh crore at end-March 2026 from ₹36.86 lakh crore a year ago; This shows that the demand for cash continues.
The ₹500 note continued to be the dominant note, accounting for 86% of the total value of the currency in circulation at ₹35.27 lakh crore, with over 7 billion notes in circulation representing 41% of the total volume. The ratio of currency to GDP increased to 12.1% at the end of March 2026, from 11.7% the previous year; This shows that cash usage remains strong despite the rapid adoption of digital payments.
However, this remains below the post-demonetization peak of 14.4% recorded in March 2021, when remonetization following the 2016 banknote ban led to a sharp increase in currency in circulation.
