On Monday, Minister of State for Finance Pankaj Chaudhary confirmed
GS3Economy · S&T · Environment · Security· Monetary policy, RBI & banking· Prelims + Mains·
Why in news
Minister of State for Finance confirmed that the RBI will trial Rs 10 and Rs 20 polymer notes worth Rs 3,000 crore to enhance currency durability.
Background
The RBI plans to introduce 100 crore pieces each of the Rs 10 and Rs 20 denominations. The polymer sheets will be sourced via a global tender issued by BRBNMPL, an RBI subsidiary.
Facts for Prelims
- BodyBRBNMPL: A subsidiary of the Reserve Bank of India (RBI) involved in banknote manufacturing.
- FactThe RBI plans to trial 100 crore pieces each of the Rs 10 and Rs 20 denominations.
- FactThe total value of the polymer notes to be trialed is Rs 3,000 crore.
For Mains
Q. Discuss the logistical and economic implications of introducing polymer currency in India, balancing the need for note durability against the challenges of counterfeiting and digital transition.
Dimensions to cover in your answer
- Counterfeit risk: Potential for high-quality polymer replicas to bypass traditional security features of paper notes.
- Logistical friction: Challenges in sorting and automated processing of mixed polymer and paper currency in circulation.
- Digital transition: Risk of polymer notes slowing the shift toward a less-cash economy by maintaining physical currency reliance.
Keywords: Monetary Policy · Currency Management · Polymer Notes · Durability · Digital Payments
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