RBI’s currency printing arm invites bids for polymer note material | Finance News

India has taken its first formal step towards introducing polymer banknotes, with the currency printing arm of the Reserve Bank of India (RBI) inviting global Expressions of Interest (EoIs) for the supply of polymer substrate sheets embedded with security features, The Economic Times reported.

Bharatiya Reserve Bank Note Mudran (BRBNMPL) has invited eligible domestic and international manufacturers to submit bids by August 18 for manufacturing opacified polymer substrate sheets designed for banknote printing.

If adopted, this would mark a significant shift for India, where currency has been printed on specialised paper for nearly a century. However, the EoI does not indicate the denominations that could be printed on polymer substrate or provide a timeline for their rollout.

The tender prescribes strict national security requirements. Prospective suppliers must obtain security clearance from the government, isolate any operations in China or Pakistan from the India contract, refrain from sourcing raw materials for India’s banknote substrate from the two countries, and commit not to supply India-specific substrate to any third country.

To qualify, bidders must have supplied polymer banknote substrate with security features to central banks or banknote printing organisations for at least three years. They must also demonstrate the ability to supply at least 20,400 reams, or 30 per cent of the indicative requirement.

BRBNMPL has indicated an initial requirement of 68,000 reams, around 34,000 reams each for two denominations, but clarified that the quantity is meant only for immediate needs. Procurement could increase following successful field trials.

This comes after RBI Governor Sanjay Malhotra’s remarks last month that the central bank was exploring the possibility of introducing polymer banknotes. He had also emphasised that discussions were still at an early stage. Polymer notes, made from durable plastic films, generally last longer than paper currency because they are more resistant to wear and tear.

The move also comes as the RBI’s currency printing expenditure has declined. According to the central bank’s annual report, note printing costs fell nearly 25 per cent to ₹4,875 crore in 2025–26, reflecting lower printing requirements.

Despite this, the value of currency in circulation rose 12 per cent year-on-year to ₹41.23 trillion at the end of March 2026, showing the continued demand for cash. The ₹500 note remained the dominant denomination, accounting for 86 per cent of the total value of currency in circulation and over 7 billion notes, or 41 per cent of the total volume.

The currency-to-GDP ratio also edged up to 12.1 per cent from 11.7 per cent a year earlier, suggesting cash usage remains resilient despite the rapid expansion of digital payments. However, it remains below the post-demonetisation peak of 14.4 per cent recorded in March 2021.