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India has moved a step closer to introducing polymer currency, with the Centre approving the Reserve Bank of India’s (RBI) proposal to print two billion polymer banknotes for field trials. However, the new Rs 10 and Rs 20 notes are unlikely to enter circulation immediately, as the central bank must first complete extensive testing before deciding on a nationwide rollout.
Minister of State for Finance Pankaj Chaudhary informed the Lok Sabha on Monday that the government has approved the RBI’s proposal to issue one billion polymer Rs 10 notes and one billion polymer Rs 20 notes for field trials. If the trials are successful, the central bank will begin regular issuance of polymer banknotes in these two denominations.
“The RBI, with the recommendation of its Central Board, had sent a proposal to the government… for the introduction of one billion pieces each of Rs 10 and Rs 20 polymer banknotes for field trials and for the regular issuance of polymer banknotes in these two denominations after the successful completion of field trials. The proposal has been approved by the government,” Chaudhary said in a written reply.
When could the new notes be launched?
While the approval marks a significant milestone, there is no official launch date yet.
The RBI has only been authorised to conduct field trials, during which the polymer notes will be tested under different climatic and usage conditions to assess their durability, security features and public acceptance. Only after the trials are completed and evaluated will the central bank begin regular issuance.
According to reports, the RBI has already floated a tender to procure the specialised polymer substrate required for printing the notes. Officials have indicated that it could take several months before the new notes are introduced, as both the government and the RBI want to ensure that security standards are not compromised and that the supply chain for the specialised material is robust.
Paper notes will continue alongside polymer notes
The government has clarified that polymer notes are not intended to replace paper currency altogether.
Instead, polymer and paper banknotes will coexist, with the new substrate initially being used only for Rs 10 and Rs 20 denominations. Chaudhary told Parliament there is no proposal to replace all paper currency with polymer-substrate banknotes.
The move comes as the RBI seeks to improve the longevity of lower-denomination notes, which are frequently exchanged and wear out much faster than higher-value currency.
Why is RBI switching to polymer?
According to the finance ministry, international studies have shown that polymer banknotes last significantly longer than conventional paper notes. Their higher durability could reduce replacement costs over time despite higher initial production expenses.
The RBI’s annual report for FY25 showed that expenditure on securely printing paper currency rose to Rs 6,372.8 crore from Rs 5,101.4 crore in the previous financial year, largely due to higher demand for banknotes.
Officials believe longer-lasting polymer notes could help reduce the frequency of reprinting lower-denomination currency.
Digital payments unlikely to be affected
The finance ministry also dismissed concerns that polymer notes could affect India’s fast-growing digital payments ecosystem.
“The introduction of polymer banknotes is currently in a preliminary phase and the impact on digital payments, if any, could be ascertained only after the regular issuance of these notes. Moreover, banknotes and digital payment systems are complementary payment tools available to the public,” Chaudhary said.
India revives a long-pending plan
The proposal revives an idea first explored more than a decade ago. India had planned to introduce polymer banknotes in 2012 to improve durability, but the initiative was shelved because of technological challenges.
Since then, the RBI has repeatedly examined the feasibility of adopting polymer currency. RBI Governor Sanjay Malhotra confirmed in June that the central bank was evaluating the proposal, including its costs and benefits.
Around 60 countries have already introduced polymer banknotes. Australia pioneered the technology in 1988, followed by countries including Canada, Singapore, Malaysia, Indonesia, Thailand and Romania.
For India, the field trials will determine whether the longer-lasting notes can withstand the country’s diverse climatic conditions before they are rolled out on a wider scale.
