RBI Considers Proposal for Polymer Banknotes Amid Strong Cash Preference
Polymer banknotes proposal under consideration: RBI Governor Malhotra
Image: Business Standard
The Reserve Bank of India (RBI) Governor Sanjay Malhotra announced that the central bank is evaluating a proposal for polymer banknotes, assessing their advantages and disadvantages. This comes as a survey indicates a strong preference for cash among the public, with banknotes in circulation reaching ₹41.23 trillion by March 2026.
- 01The RBI is considering the introduction of polymer banknotes, currently in the preliminary evaluation stage.
- 02Banknotes in circulation increased by 11.9% year-on-year to ₹41.23 trillion by March 2026.
- 03The ₹500 note constitutes 85.5% of the total banknotes in circulation.
- 04Expenditure on security printing decreased to ₹4,875.2 crore in FY26 from ₹6,372.8 crore the previous year.
- 05A previous attempt to introduce polymer ₹10 notes in 2012 was shelved due to technological challenges.
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During a media interaction, Reserve Bank of India (RBI) Governor Sanjay Malhotra confirmed that the central bank is considering a proposal for polymer banknotes. This evaluation is still in its early stages, with the RBI assessing the potential benefits and drawbacks of such a transition from the current 100% cotton paper notes. A recent survey highlighted a strong public preference for cash, which is reflected in the substantial growth of banknotes in circulation, which reached ₹41.23 trillion by March 2026, marking an 11.9% increase year-on-year. The ₹500 note remains dominant, accounting for 85.5% of the total. Additionally, the expenditure on security printing has decreased significantly, indicating a reduced need for new banknotes. Past attempts to introduce polymer notes, such as the 2012 initiative for ₹10 notes, faced technological challenges and were ultimately abandoned.
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The consideration of polymer banknotes may influence the future of currency durability and security in India, affecting both consumers and businesses.
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