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Reserve Bank of India Governor Sanjay Malhotra on Friday said a proposal to introduce polymer currency notes is under consideration, but clarified that no decision has been taken and the idea remains at a preliminary stage.

 

Speaking at a post-monetary policy press conference in Mumbai, Malhotra said the central bank was examining the feasibility of polymer notes and assessing their potential benefits and drawbacks.

 

“As far as polymer notes are concerned, the proposal is under consideration. As soon as any decision is taken on it, we will inform you,” he said.

 

The governor acknowledged that recent media reports on the subject contained some truth but stressed that the proposal was still in the early stages of evaluation.

 

“We are examining the pros and cons of it and whether it would be worthwhile to implement. It is still at a preliminary stage,” Malhotra said.

Also read: RBI plans to introduce polymer banknotes to cut costs

Polymer banknotes, made from plastic rather than paper, are generally considered more durable and resistant to wear and tear. India had earlier explored the possibility of introducing such notes.

 

In February 2014, the government informed Parliament that one billion polymer Rs 10 notes would be introduced on a trial basis in Kochi, Mysore, Jaipur, Shimla and Bhubaneswar. However, the initiative was later put on hold due to technological and operational challenges.

 

Meanwhile, Malhotra also sought to allay concerns about cash availability, stating that adequate currency was available in the system and that any shortages at ATMs would be addressed promptly.

 

“If there is a shortage, we will certainly ensure that the shortage is met,” he said.

 

The RBI has sufficient currency stocks to replenish ATMs and bank branches, he added.

 

“Our full effort will be to ensure that wherever there is a shortage of currency in one or two places at ATMs, we will deliver currency there promptly and at a rapid pace,” Malhotra said.

 

His remarks came amid concerns in some quarters over cash availability at select locations, with the RBI maintaining that there was adequate currency for distribution across the banking system.