RBI set to launch ‘plastic’ notes at start of next financial year

The new notes will be checked for durability and adaptability to Indian conditions before the RBI clears it for circulation.

“We will test and check on how they perform in the Indian climate, conditions, and other infrastructure that we have put in place,” Malhotra said. “We are targeting that circulation, if everything goes to plan, starts from the beginning of the next financial year,” he said.

The project will begin with the lower denomination notes of Rs 10 and Rs 20 which have “higher velocity” to change hands, and thus are prone to more wear and tear.

The RBI’s trial of plastic notes will see 100 crore pieces of Rs 10 and Rs 20 notes each being introduced, totalling Rs 3,000 crore. The central bank’s subsidiary Bharatiya Reserve Bank Note Mudran Private Limited had last month floated a global tender for 3.4 crore polymer sheets for the same purpose.

The tender had deemed the sheets an “immediate requirement” and once field trials were successful, “we intend to go for procurement of larger quantities of substrate across different denominations”.

This would be the central bank’s second attempt at introducing plastic notes, having attempted to procure 100 crore bank notes of Rs 10 each. These were to be trialled across cities under various climates like Kochi, Shimla and Bhubaneswar. However, the trial was not successful due to “certain technical infirmities”.