The Reserve Bank of India (RBI) seems to have shelved its project to implement plastic banknotes because of concerns about the ability of the currency notes to withstand Indian climatic conditions, characterized by high temperatures.
In addition, with the Unified Payments Interface (UPI)- based transactions growing by and bounds and the planned launch of Central Bank Digital Currency (CBDC) in FY23, the need for introducing plastic banknotes has diminished.
Per RBI’s 2015-16 yearly report, a billion bits of banknotes in the denomination of ₹10 were to be imprinted on all available plastic (polymer) substrates and issued to the public in five cities having different climatic zones Kochi, Mysuru, Shimla, Jaipur and Bhubaneswar, on a trial basis.
The Bharatiya Reserve Bank Note Mudran Private Limited (BRBNMPL) and the Security Printing and Minting Corporation of India Limited (SPMCIL) have taken up this project.
In any case, not much progress could be made in such a manner because of reasons, for example, the chance of plastic banknotes responding to high temperatures and catching fires and UPI-based transactions gaining traction.
While polymer banknotes have a long life, weigh less, and are waterproof as compared to paper banknotes, Bankers emphasize that once the former react to high temperatures, it may be difficult to get them exchanged.