Reserve Bank of India Initiates Transition to Polymer Banknotes

The Reserve Bank of India is initiating a transition from paper-based currency to durable polymer banknotes, reviving a decade-old proposal to lower the high costs of replacing soiled notes. In FY25, the bank disposed of 23.8 billion soiled banknotes. To facilitate this shift, the bank's wholly owned subsidiary, Bharatiya Reserve Bank Note Mudran Private Limited, issued a global Expression of Interest on July 17, 2026, for the supply of 68,000 reams of opacified polymer substrate sheets.

The procurement focuses on Biaxially Oriented Polypropylene (BOPP)-based substrates featuring security elements like clear windows with portraits, iridescent patterns, and metallic numerals. The initial pilot project will target the ₹10 and ₹20 denominations to assess durability and public acceptance, with a potential full-scale rollout expected in 2027. Polymer notes are designed to last up to 2.5 times longer than paper and provide better resistance to moisture and counterfeiting.

The tender includes strict national security restrictions, prohibiting the use of raw materials from China or Pakistan. Bidders must firewall any operations in those countries from India-linked business and obtain certification from the Department for Promotion of Industry and Internal Trade's Registration Committee. While Governor Sanjay Malhotra noted the proposal remains at a preliminary stage, the subsidiary indicated that larger procurement across multiple denominations will likely follow successful field trials.