India’s banknotes may soon undergo a plastic makeover.The country is moving ahead with its plans to explore polymer notes, with the Reserve Bank of India’s Currency Printing Corporation inviting global and local manufacturers to bid for specialized materials needed to print such notes.
Initially, the notes are likely to be of lower denominations of Rs 10 and Rs 20, according to sources cited by ANI.
Bharatiya Reserve Bank Note Mudran (BRBNMPL) has issued an Expression of Interest (EoI) seeking suppliers of opaque polymer substrate sheets embedded with security features. According to ET, interested manufacturers have been asked to submit their bids by August 18.The move could pave the way for India’s first polymer banknotes, replacing the specialized paper that has been used to print the country’s currency for nearly a century.
What are polymer banknotes?
Polymer banknotes are manufactured using a special plastic substrate instead of the cotton pulp paper currently used for Indian currency.Polymer sheets were first developed in Australia, and have since been adopted by countries including the UK, Canada, New Zealand and Singapore.Compared with traditional banknotes, polymer banknotes are more durable, resistant to moisture and dirt, and can withstand heavy handling for a longer period.
Studies conducted worldwide have shown that polymer sheets can last at least twice as long as paper sheets, and in some cases, up to five times longer.Because they remain in circulation longer, they also need to be replaced less frequently, which can result in lower printing and replacement costs over time.
The tender specifies strict eligibility and security requirements
The proposed purchase comes with detailed eligibility requirements and security guarantees.Only manufacturers that have supplied polymer banknote substrates with built-in security features to central banks or banknote printing institutions for at least the past three years are eligible to participate.
They must also be able to supply a minimum of 20,400 packages, equivalent to 30% of the indicative requirement.For its initial requirements, BRBNMPL estimated the demand at 68,000 packages, with about 34,000 packages allocated to each of the two communities. The company explained that this quantity is intended only for initial requirements and that larger orders are likely to be made only after successful field trials.The tender also prohibits bidders from sourcing raw materials for the substrates of India’s banknotes from China or Pakistan.
Manufacturers will need to obtain government security clearance, must isolate any operations in those countries from the Indian contract, and must undertake not to supply the intended Indian substrate to any third country.
Why is the Reserve Bank of India exploring polymer currency?
One of the main reasons behind this proposal is the deterioration of the paper currency caused by frequent handling and varied climatic conditions in India.According to data from the Reserve Bank of India (RBI), nearly 200,000 damaged currency notes are recalled and destroyed every year.
High value denominations such as Rs 100 and Rs 500 account for a large share of damaged notes removed from circulation.Polymer banknotes can also include advanced security features such as transparent windows, holograms, color-changing elements and other anti-counterfeiting measures that are difficult to replicate compared to traditional paper currency.Reserve Bank of India (RBI) data has shown a rise in counterfeit high-denomination notes being detected in recent years, especially Rs 500 notes.
Countries that have adopted polymer currency generally report lower levels of successful counterfeiting.Australia, which switched entirely to polymer banknotes by the mid-1990s, says the latest generation of banknotes includes many advanced security features that make them extremely difficult to counterfeit.
How long until india holds polymer papers
The latest development comes weeks after Reserve Bank of India Governor Sanjay Malhotra said that the central bank is studying the possibility of introducing polymer notes.Speaking to the media after the MPC meeting, Malhotra said: “The polymer sheet is under consideration. We are examining the pros and cons. It is at a preliminary stage.”Apart from discussing inflation, interest rates, global uncertainties and the impact of the Middle East conflict on commodity prices, the RBI Governor also spoke about the possibility of introducing a new generation of polymer notes instead of the traditional cotton-based paper.The Monetary Policy Committee unanimously decided to keep the repo rate unchanged at 5.25% and maintained its neutral policy stance, citing global uncertainty, geopolitical tensions in the Middle East and inflation concerns.
In discussion for years
The idea of introducing polymer currency in India is not new.The Reserve Bank of India first proposed polymer notes in 2007 and later announced pilot projects for 10 rupee polymer notes in Jaipur, Shimla, Bhubaneswar, Mysuru and Kochi.Over the years, numerous tenders and feasibility studies were conducted, but the proposal remained at the planning stage.In 2016, the government informed Parliament that the process of purchasing polymer sheets had begun, although this was not followed nationwide.Recently, the Reserve Bank of India has also been experimenting with glossy notes, which are traditional paper notes coated with a protective polymer layer to improve durability.