NEW DELHI : The Reserve Bank of India (RBI) Governor Sanjay Malhotra has said that the proposal to introduce polymer currency notes in India is currently under consideration and remains at a preliminary stage, reported the PTI.
Speaking on the issue, Malhotra said the central bank is examining the proposal, but no final decision has been taken so far.
The RBI Governor stated that discussions regarding polymer banknotes are still in the early stages.
He said the proposal is being evaluated and remains under consideration by the central bank.
His remarks come amid growing interest in the possibility of introducing polymer-based currency notes as an alternative to traditional paper notes.
What are polymer currency notes?
- Polymer notes are banknotes made from a special plastic material rather than cotton-based paper.
- Several countries, including Australia, Canada, the United Kingdom and New Zealand, have adopted polymer currency due to its durability and security features.
- These notes are generally more resistant to wear and tear, water damage and counterfeiting.
Potential benefits
- It is believed that polymer notes can last significantly longer than conventional paper currency, reducing replacement costs over time.
- They also offer advanced security features, making them more difficult to forge.
- The polymer notes tend to remain cleaner and can withstand harsh environmental conditions better than paper-based notes.
RBI projects India’s GDP growth at 6.6 per cent for FY27
Meanwhile, RBI on Friday projected real GDP growth for 2026-27 at 6.6 per cent—with Q1 at 6.6 percent, Q2 at 6.3 per cent, Q3 at 6.5 per cent; and Q4 at 6.8 per cent — 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.
India’s manufacturing and services PMI suggest that both sectors continue to be resilient, and business expectations are still positive, said RBI Governor Sanjay Malhotra after the three-day MPC meeting.
“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,” he noted.
Services exports have also remained robust, reflecting sustained demand despite concerns about AI.
Malhotra, while expressing about the economic dynamics, said, “Overall, the economic situation has broadly exhibited resilience and withstood the conflict spillovers, although the impact of cost pressures is becoming visible.”
‘Inflation remains below target’
He further stated that CPI inflation remains below the target despite global shocks, as the pass-through to domestic prices has been limited.
He highlighted, “While the baseline projections point towards headline inflation firming up towards the upper tolerance level in Q3 2026-27, the impact of the supply shock is expected to wane in Q4 onwards. The underlying inflation pressures continue to remain benign at this juncture.”
Inflation projections for FY 2026-27
The Central Bank projected CPI inflation for 2026-27 at 5.1 per cent, with Q1 at 4.2 per cent; Q2 at 5.1 per cent; Q3 at 5.9 per cent; and Q4 at 5.4 per cent.
“Core inflation is projected at 4.7 per cent for 2026-27. These forecasts are subject to upside risks due to global supply chain disruptions, global commodity price shocks, uncertainty about the spatial and temporal distribution of the south-west monsoon and El Nino conditions. Adequate stock of food grains and satisfactory reservoir levels, however, provide some comfort,” said Malhotra, the news agency reported.
