Plastic notes should lower RBI's printing costs, Pg15

Key Highlights:

• Bharatiya Reserve Bank Note Mudran Private Ltd (BRBNMPL), a subsidiary of the Reserve Bank of India (RBI), has floated a tender for polymer sheets.
• This tender is for a trial project to introduce plastic currency notes in India for the first time.
• Plastic notes are projected to last 2-6 times longer than traditional paper notes, reducing printing frequency and environmental impact.
• The RBI incurred printing costs of ₹52,095 crore for nearly 26,000 crore notes over the past decade.

Detailed Insights:

• The initiative aims to evaluate the practical benefits and challenges of polymer currency within India's diverse climatic conditions.
• The enhanced durability of plastic notes is expected to lead to substantial long-term savings in currency production and management for the RBI.
• The highest annual currency printing cost for the RBI was ₹7,965 crore in 2016-17, a period marked by the demonetisation of high-denomination notes.
• Several countries globally, including Australia, Canada, and the United Kingdom, have successfully transitioned to polymer banknotes due to their longevity and advanced security features.
• The adoption of plastic notes could also bolster efforts against counterfeiting due to the difficulty in replicating their embedded security elements.

Scientific/Technical Concepts Involved:

• Polymer Notes: Currency notes manufactured from a plastic polymer, typically biaxially oriented polypropylene (BOPP), known for its durability and resistance to wear.
• Demonetisation: The act of withdrawing a currency unit from circulation as legal tender, often implemented to combat illicit financial activities or inflation.