India Reopens Polymer Banknote Debate After More Than a Decade

According to sources, the Reserve Bank of India (RBI) has revived discussions about introducing polymer banknotes and is considering a pilot project for public circulation. The proposal was reportedly discussed at a recently held RBI board meeting. However, the RBI has not publicly announced such a programme, and no reference to polymer banknotes appears in its Annual Report for FY2025-26, released on 29 May 2026, covering the year ending 31 March 2026.

The move is understood to be driven by the advantages of synthetic substrates: longer banknote lifespans, lower long-term replacement costs, and improved processing efficiency within automated currency management systems.

Rising demand for cash

Despite the extensive growth of digital payment systems across the subcontinent, India’s demand for physical cash remains robust. The total value of banknotes in circulation increased by c. 11.9% during the fiscal year, rising to ₹41.25 trillion in FY2025-26 from ₹36.86 trillion in FY2024-25.

Interestingly, total banknote production in FY2025-26 stood at 28.1 billion pieces, compared to 30.3 billion in FY2024-25 and 24.3 billion in FY2023-24. The ₹500 denomination note accounted for the highest production, with 11 billion pieces printed during the year.