Last update:November 20, 2024, 4:28 p.m. IST

Unlike regular paper, which is mainly made of wood pulp, Indian currency paper is made of a different fabric.

The RBI plays a central role in the management of currency in India, as outlined in various sections of the Reserve Bank of India Act.

The Indian rupee, a symbol of confidence and economic strength, is not only a medium of exchange but also a marvel of sophisticated craftsmanship. Although it may appear to be ordinary paper, Indian currency banknotes are made from a unique blend of materials that ensure durability, security and resistance to counterfeiting.

What is paper money made of?

The paper currently used for printing currency notes in India is made from 100% cotton.

The composition of paper money

Unlike regular paper, which is mainly made of wood pulp, Indian currency paper is made of cotton. This composition gives the notes their distinctive texture, longevity and resistance to tearing. The Reserve Bank of India (RBI) ensures that the material is of the highest quality to withstand frequent handling, bending and exposure to various elements.

Why a currency based on cotton?

Cotton fibers make up paper money:

• Durable: Indian currency notes can withstand rough use and remain intact for long periods of time.
• Eco-friendly: Being cotton-based, the notes are biodegradable, reducing the environmental impact once discarded.
• Secure: The unique texture makes counterfeiting more difficult, adding an extra layer of security.

Special Features of Paper Money

Indian banknotes incorporate several security features to help distinguish genuine notes from fakes. These include:

• Silver Security Thread: A machine-readable thread embedded in the note.
• RBI seal and governor’s signature: official markings of authenticity.
• Transparent Ledger: A design element that aligns perfectly when held against the light.
• Watermarks and electrotype watermark: visible when the banknote is held up to the light.
• Micro Lettering: Tiny inscriptions visible under magnification.
• Latent Image: A hidden design visible only when viewed from an angle.

Additionally, the banknote’s numerals are printed with color-changing ink, appearing green when viewed flat and changing to blue when tilted.

Interestingly, other countries also use cotton-based materials for their currency. In the United States, for example, bank notes are made of 25% linen and 75% cotton. This specialty paper is manufactured exclusively by Crane Currency in Dalton, Massachusetts, for the Bureau of Engraving and Printing, with strictly restricted access to ensure security.

A symbol of trust

Indian banknotes are not simple instruments of monetary transactions; they carry history, security and innovation. The choice of materials and rigorous production processes underline the efforts put into creating each rupee note, reflecting the pride and confidence placed in the Indian economy.

Role of Reserve Bank of India in currency management

The RBI plays a central role in the management of currency in India, as outlined in various sections of the Reserve Bank of India Act.

Issuing tickets:

Under Section 22 of the Act, the RBI has the exclusive right to issue currency notes in India. The design, shape and material of these notes are finalized by the Central Government after considering the recommendations of the Central Board of the RBI, as per Section 25 of the Act.

Planning and procurement:

The RBI estimates the annual requirement for bank notes, broken down by denominations, in consultation with the central government and other stakeholders. It places orders with currency printing presses for their production.

Ensuring quality:

Under its ‘Clean Note Policy’, the RBI ensures the circulation of good quality bank notes. Banknotes returned from public circulation are carefully inspected. Those deemed suitable are reissued, while soiled or damaged notes are destroyed to maintain the overall quality of the currency. used.

Role in the plays:

The RBI’s involvement in the coin business is limited to their distribution. The design and minting of coins of different denominations is handled by the Government of India under the Currency Act, 2011.

Through these measures, the RBI ensures a robust and secure foreign exchange management system, helping to strengthen public confidence in the monetary framework.

What to do if you receive a counterfeit note?

If you suspect that a bank note in your possession is counterfeit, take the following steps quickly:

Report to authorities: Go to the nearest police station or bank branch to report the incident. Share all relevant details, such as time, location, and description of the person or source you received the note from.

Inform your bank: If the counterfeit note was dispensed by an ATM, inform your bank immediately. They can guide you on next steps or explore the issue further.

Avoid trying to use or pass the counterfeit ticket, as this is illegal. Instead, let the authorities manage the situation to prevent the circulation of counterfeit money.