India has moved a step closer to introducing low-denomination polymer banknotes after Indian and foreign companies submitted bids to supply polymer substrate sheets containing built-in security features.
The bids were submitted in response to a global Expression of Interest issued by Bharatiya Reserve Bank Note Mudran (P) Ltd (BRBNMPL), a subsidiary of the Reserve Bank of India. The deadline for submissions was August 18. At least two foreign polymer currency manufacturers and an Indian substrate producer working with UK banknote manufacturer De La Rue have placed bids, The Indian Express has learnt.
The sensitivity surrounding future supplies of polymer banknotes has prompted BRBNMPL to impose several safeguards on participating companies. Bidders have been required to sign an integrity pact, a confidentiality contract and a no-agent pact. They must also undertake to firewall their operations in India from any operations they may have in China and Pakistan.
The requirements extend to the composition of the proposed banknotes. Bidders must certify that their polymer substrate contains no animal tallow or its DNA. Concerns surrounding animal-derived tallow in banknotes, including controversies in countries such as the UK, are understood to have been among the reasons for the Reserve Bank of India’s hesitation over introducing polymer currency in India.
BRBNMPL’s EOI documents describe an “immediate” requirement for approximately 68,000 reams of polymer substrate for printing Indian banknotes. Each ream is to contain 500 sheets of polymer film, with bidders required to provide samples alongside their submissions.
The samples will be subjected to testing across various climatic zones. Companies whose samples meet the required criteria will then be permitted to participate in the final BRBNMPL tender. In a corrigendum issued before the August 18 deadline, BRBNMPL clarified that bidders did not need to provide evidence of their financial standing at this qualifying stage.
Among the companies understood to be competing is Cosmo First, described as India’s largest exporter of biaxially oriented polypropylene, or BOPP, and a major supplier to De La Rue. The UK-headquartered company describes itself as the world’s largest banknote supplier and says it has assisted several countries in shifting towards polymer currency, which it characterises as cleaner, greener, more secure and durable.
Industry sources say Cosmo First has identified De La Rue as its “technical partner”. The banknote manufacturer is expected to provide the security features required by BRBNMPL in the polymer substrate.
Another bidder is understood to be Australia-based CCL Secure, a pioneer in polymer banknote supplies. The company currently provides polymer solutions to 40 central banks and promotes anti-counterfeiting features in its products. It also claims that polymer banknotes can last six times longer than cotton-based currency paper.
CCL Secure offers countries the option of combining polymer-based banknotes with conventional currency paper made from cotton pulp. That approach is reportedly what the RBI is currently considering for India, with polymer notes initially proposed for the Rs 10 and Rs 20 denominations.
The international polymer currency market has already expanded beyond the companies traditionally associated with the technology. Vietnam, for example, has imported polymer substrate from CCL Secure. Three years ago, however, a private Hanoi-based company, Q&T Hi-tech Polymer Company Limited, began supplying banknotes domestically.
Q&T Hi-tech Polymer Company Limited claims that its technology provides a 78% lifecycle saving compared with cotton paper currency. The company is now seeking to expand beyond Vietnam and, according to industry sources, has also submitted a bid for the BRBNMPL EOI.
The competing bids mark another step in India’s consideration of polymer banknotes, while the stringent conditions attached to the procurement process demonstrate the sensitivity surrounding the technology and its supply chain. The initial focus on Rs 10 and Rs 20 notes would allow the country to introduce the polymer option at the lower end of its currency denominations, subject to the testing and final tender process.
