RBI Initiates Move Towards Polymer Banknotes, Invites Global Bids

New Delhi, Jul 18 (KNN) India has initiated its first formal move towards introducing polymer banknotes, with the Reserve Bank of India (RBI) inviting global bids for the supply of specialised polymer substrates used in currency printing.

The RBI’s printing subsidiary, Bharatiya Reserve Bank Note Mudran Private Limited (BRBNMPL), has sought Expressions of Interest (EoIs) from domestic and international manufacturers for producing polymer substrate sheets embedded with advanced security features. Interested firms have been asked to submit bids by August 18, The Economic Times reported.

While the tender outlines technical and eligibility requirements, it does not specify the denominations to be printed or a timeline for the rollout of polymer notes.

Strict Security and Eligibility Norms

The procurement process includes stringent national security conditions. Bidders must obtain government clearance, avoid sourcing raw materials from China or Pakistan, and ensure that India-specific substrates are not supplied to third countries. 

Suppliers must also have at least three years of prior experience in providing polymer banknote materials to central banks and demonstrate sufficient production capacity.

Initial Requirement and Pilot Scope

BRBNMPL has indicated an initial requirement of 68,000 reams of polymer substrate, likely split across two denominations. However, this is limited to immediate needs, and procurement volumes may increase following successful field trials.

Durability and Cost Considerations

Polymer banknotes, made from plastic films, are known to last longer than traditional paper currency due to their higher resistance to wear and tear. The move comes even as India’s currency printing costs declined by nearly 25 per cent to Rs 4,875 crore in 2025–26, reflecting lower printing volumes.

Cash Usage Remains Strong

Despite the rise in digital payments, demand for physical currency continues to grow. The total value of currency in circulation increased by 12 per cent year-on-year to Rs 41.23 trillion as of March 2026. The Rs 500 note remains the most widely used, accounting for a dominant share in both value and volume.

The currency-to-GDP ratio also rose slightly to 12.1 per cent, indicating sustained reliance on cash, although it remains below earlier peaks. Overall, the RBI’s move signals an exploratory but significant shift in India’s currency framework.

(KNN Bureau)