The Reserve Bank of India (RBI) has received approval from the government to issue 1 billion pieces each of ₹10 and ₹20 polymer banknotes for field trials, Minister of State for Finance Pankaj Chaudhary informed Parliament on Monday.
The proposal, submitted by the RBI’s Central Board under Section 25 of the Reserve Bank of India Act, 1934, aims to evaluate the performance of polymer banknotes before their regular issuance in these denominations. The government has approved the proposal, and wider circulation will begin after successful completion of the trials.
The minister clarified that polymer banknotes will be issued alongside existing paper-based currency and there is no plan to replace paper notes completely. He said polymer currency has a significantly longer lifespan compared to traditional paper notes, according to international studies.
The move comes as the RBI explores ways to improve the durability of banknotes and address increasing demand for currency. RBI Governor Sanjay Malhotra had earlier confirmed that the central bank was examining the advantages and challenges associated with polymer notes.
India had previously attempted to introduce polymer banknotes in 2012, but the initiative was discontinued due to technological challenges at the time. Around 60 countries worldwide have already adopted polymer currency, with Australia becoming the first country to introduce such notes in 1988. The RBI said the impact of polymer banknotes on digital payments can only be assessed after regular issuance, adding that cash and digital payment systems will continue to remain complementary modes of transaction.
