RBI set to launch ‘plastic’ notes at start of 2027-28, Pg13

Key Highlights:

• The Reserve Bank of India (RBI) plans to introduce polymer banknotes starting from Financial Year 2027-28.
• The initial launch will focus on lower denominations of ₹10 and ₹20 notes.
• The primary objectives are to enhance currency durability and expand production capacity.
• Bharatiya Reserve Bank Note Mudran Private Limited (BRBNMPL) has issued a global tender for polymer sheets for this purpose.

Detailed Insights:

• Polymer notes are expected to last 2-4 times longer than traditional paper currency, especially for high-velocity denominations.
• The RBI will conduct thorough testing to ensure the notes perform well under India's diverse climatic conditions.
• This initiative aims to reduce the wear and tear on frequently used banknotes, which are prone to damage.
• A previous attempt by the RBI to introduce plastic ₹10 notes for trial was unsuccessful due to technical issues.
• The project will initially introduce 100 crore pieces each of ₹10 and ₹20 notes for circulation.

Key Concepts Involved:

• Polymer Banknotes: Currency notes manufactured from a plastic polymer, offering enhanced durability, water resistance, and security features.
• Financial Year (FY): A 12-month period used for financial accounting and reporting, typically from April 1 to March 31 in India.
• Bharatiya Reserve Bank Note Mudran Private Limited (BRBNMPL): A wholly-owned subsidiary of the RBI responsible for printing Indian banknotes.
• Monetary Policy: Actions undertaken by a central bank, like the RBI, to manage the money supply and credit conditions to achieve economic objectives.