The RBI will issue new plastic notes on April 1st; find out what will be special about them..

The Reserve Bank of India (RBI) is likely to introduce plastic currency notes on April 1 next year. Initially, these will be in the denominations of ₹10 and ₹20. The central bank plans to issue these plastic notes as part of a pilot project, according to sources familiar with the matter who spoke to Moneycontrol.

The new plastic notes will have the same dimensions as the existing ₹10 and ₹20 notes. The RBI has made this decision to help banks save on costs; had the new plastic notes been issued in a different size, banks would have been required to modify their ATMs—a process that would have incurred significant expenditure. The new plastic notes will fit into the existing slots designated for ₹10 and ₹20 notes in ATMs.

Banks will not have to incur costs for ATM modifications.

A senior official at a public sector bank stated, "By issuing the new plastic notes in the same size as the existing ones, banks will avoid the costs associated with modifying their ATMs. Since this is currently a pilot project, the initiative is beginning with smaller denominations, which will result in substantial cost savings."

Previously, when the government introduced new ₹100 and ₹200 notes, the modifications required for ATMs cost approximately ₹100 crore. About 2.4 lakh ATMs had to be adjusted to accommodate those notes, which were of a different size. This time, the RBI aims to avoid the need for such ATM modifications. Not having to modify ATMs will result in savings of over Rs 21 crore.

A senior official at another public sector bank stated, "For a bank with 8,500 ATMs, this would lead to savings of approximately Rs 21.25 crore. Since this project has been launched as a pilot, it will facilitate the distribution of plastic notes to the public through bank counters and ATMs." An email sent to the RBI seeking further details on this matter remained unanswered.

RBI subsidiary invites bids from companies.

According to sources, the RBI’s subsidiary, Bharatiya Reserve Bank Note Mudran Private Limited (BRBNMPL), received six bids for this pilot project. Polymer science firm Uflex, in partnership with the American company Spectra Systems, has also submitted a bid. For the people of India, the introduction of plastic notes will be a novel experience.

New plastic notes will have a lifespan up to four times longer.

In August, RBI official Sanjay Malhotra stated that the lifespan of plastic notes would be two to four times longer than that of paper currency. The pilot project will assess the experience of using plastic notes within the specific climatic conditions of a country like India. The government has already approved the printing of one billion plastic notes each for the Rs 10 and Rs 20 denominations. Plastic notes are already in use in several countries around the world.

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