Economics of plastic notes: Why RBI is considering polymer banknotes

The Reserve Bank of India’s currency printing arm has invited proposals to make polymer based banknotes, ET reported last week. The polymer option can be more durable and secure, with environmental and cost benefits. Every year, India destroys tens of billions of notes worn down by use, and thousands of fake Rs 500 notes enter the banking system. Polymer has helped several countries fight these battles, and could do the same for India.

India destroys billions of notes every year

In the past decade, India has junked notes worth nearly Rs 50 trillion.

Counterfeit notes remain a concern

The Rs 500 denomination continues to account for the overwhelming majority of fake notes.

A longer lifespan means fewer replacements, lower printing costs and reduced waste.

Key milestones in India's journey towards polymer

~1988
Australia: World's first polymer note released ($10)

1996
Australia becomes first country to convert all denominations to polymer

~1990s-2000s
Vietnam, Malaysia, Romania, NZ, Singapore among nations to adopt polymer notes

2011-2013
Canada rolls out all denominations in phases

2012
India starts first polymer pilot with Rs 10 notes in select cities; project shelved due to ATM incompatibility

2016-2021
UK rolls out all denominations in phases

2026
India's notes printer invites proposals for polymer shift