The Reserve Bank of India aims to introduce durable polymer currency notes at the beginning of the next financial year, with the new notes expected to improve longevity, especially for lower denominations that experience frequent circulation.
Key Highlights
- RBI plans to launch polymer currency notes next financial year.
- Lower denomination notes will be prioritized.
- Polymer notes are expected to last significantly longer than paper notes.
- RBI says rollout will begin if implementation stays on schedule.
- Governor says future monetary policy decisions will remain data-driven.
The Reserve Bank of India (RBI) has announced plans to introduce polymer currency notes in the country, with the rollout targeted for the beginning of the next financial year, subject to successful implementation.
Speaking after the latest monetary policy review, RBI Governor Sanjay Malhotra said polymer banknotes offer significantly greater durability than conventional paper notes. According to the RBI, polymer notes have remained in circulation for more than three decades in several countries, making them particularly suitable for lower denomination currency that changes hands frequently.
The central bank believes the longer lifespan of polymer notes could reduce replacement costs while improving the overall quality of currency in circulation.
During the briefing, the Governor also said that future decisions on interest rates and the monetary policy stance will continue to depend on incoming economic data. He reiterated that the RBI’s primary objective remains maintaining headline inflation around the medium-term target of 4%.
Commenting on the Foreign Currency Non-Resident (Bank) [FCNR(B)] deposit scheme, Malhotra said inflows under the special window have remained robust and are expected to continue until the scheme concludes. He clarified that the RBI currently has no proposal to end the facility before its scheduled timeline.
On the rupee, the Governor noted that the domestic currency could strengthen further if geopolitical tensions ease globally. He added that the RBI will continue working to ensure orderly movements in the foreign exchange market.
