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The Reserve Bank of India has indicated plans to introduce polymer currency notes, a move that could improve durability, reduce replacement costs, and strengthen security features as cash transactions continue to grow across the country. The Central Bank also projected CPI inflation for 2026-27 at 5.1 percent, with Q1 at 4.2 percent, Q2 at 5.1 percent, Q3 at 5.9 percent, and Q4 at 5.4 percent.
The Reserve Bank of India (RBI) is considering a proposal to launch polymer currency notes in the country, Governor Sanjay Malhotra announced on Friday (June 6, 2026). The proposal is currently at its preliminary stage, Malhotra said.
The move comes almost a decade after the central bank first floated the proposal to print plastic currency notes, amid a surge in paper currency. The higher cost of printing paper currency and the increased volume of its later disposal have likely contributed to the move.
In February 2014, the government had informed the Parliament that one billion plastic notes of Rs 10 denomination would be introduced in a field trial in five cities selected for their geographical and climatic diversity. The selected cities were Kochi, Mysore, Jaipur, Shimla, and Bhubaneswar. The initiative was put on hold, as technological and operational issues surfaced.
Polymer notes are made from a special type of plastic. These are generally more resistant to wear and tear, water damage, and counterfeiting. It is believed that polymer notes can last longer than conventional paper currency. It can reduce replacement costs over time.
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If implemented, polymer banknotes could make India’s currency system more durable, secure, and cost-efficient. RBI on Friday projected real GDP growth for 2026-27 at 6.6 percent - with Q1 at 6.6 percent, Q2 at 6.3 percent, Q3 at 6.5 percent, and Q4 at 6.8 percent - saying that prolonged global supply chain disruptions, volatility in global financial markets, and weather-related shocks continue to pose downside risks to the domestic growth outlook, according to the PTI.
"On the demand side, private consumption, aided by discretionary spending, has remained resilient so far. Fixed investment has also maintained its momentum despite cost pressures. Merchandise exports recorded strong growth in April 2026, notwithstanding elevated freight and insurance costs," the RBI Governor noted.
India's manufacturing and services PMIs suggest that both sectors remain resilient, and business expectations remain positive, said RBI Governor Sanjay Malhotra after the three-day MPC meeting.
