RBI says polymer notes have a significantly longer lifespan, potentially reducing printing costs and replacement frequency.
The government has approved the Reserve Bank of India proposal to issue 1 billion pieces each of Rs 10 and Rs 20 polymer banknotes for field trials, Minister of State for Finance Pankaj Chaudhary informed Parliament on Monday.
Following the successful completion of the field trials, the RBI will regularly issue polymer banknotes in these two denominations.
'The RBI, on the recommendation of its Central Board, had sent a proposal to the government under Section 25 of the RBI Act, 1934, for the introduction of 1 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 the field trials,' Chaudhary said in a written reply to a question in the Lok Sabha.
'The proposal has been approved by the government.'
Key Points
- The government has approved RBI's proposal to conduct field trials of one billion polymer Rs 10 and Rs 20 banknotes.
- Polymer banknotes will circulate alongside existing paper currency, with no plan to replace paper banknotes entirely.
- India previously attempted polymer banknotes in 2012, but the initiative was shelved due to technological challenges.
- More than 60 countries, including Australia, Canada, Singapore and Malaysia, already use polymer currency in circulation.
Rs 10 And Rs 20 Notes
The polymer banknotes will be issued alongside paper-substrate banknotes, the minister said, adding that there is no proposal to replace paper currency with polymer banknotes.
Paper banknotes are made from traditional cotton pulp and plant fibres.
Business Standard had reported in May that the RBI was considering printing polymer banknotes to increase their shelf life and meet the surge in demand.
RBI Governor Sanjay Malhotra confirmed in June that the proposal was under consideration, with the central bank evaluating its pros and cons.
The expenditure incurred on the security printing of paper currency during 2025-2026 was Rs 4,875.2 crore as against Rs 6,372.8 crore during the previous year due to reduced indent of banknotes during FY26, RBI said in its annual report.
Why Polymer Notes Matter
'The RBI had informed that, according to international studies, the lifespan of polymer banknotes is significantly higher than that of paper banknotes,' Chaudhary said.
'The introduction of polymer banknotes is currently in a preliminary phase, and the impact on digital payments, if any, can be ascertained only after the regular issuance of these notes.
'Moreover, banknotes and digital payment systems are complementary payment tools available to the public,' he added.
India first attempted to introduce polymer banknotes in 2012 to increase their shelf life.
However, the project was shelved due to technological challenges.
Earlier this month, Bharatiya Reserve Bank Note Mudran Pvt Ltd, a wholly-owned subsidiary of RBI, invited global Expressions of Interest (EoIs) for the supply of polymer substrate sheets embedded with security features.
The deadline for submission of the EoI is August 18.
BRBNMPL manages two presses, one at Mysore in Karnataka and the other at Salboni in West Bengal.
The present capacity for both the presses is 16 billion note pieces per year on a two-shift basis.
Global Adoption Of Polymer Currency
About 60 countries have introduced polymer banknotes into circulation so far.
Australia was the first to do so in 1988, starting with a 10-dollar note, followed by Singapore, Indonesia, Thailand, and Malaysia.
Among European countries, Romania was the first to introduce a polymer banknote in 1999.
Canada followed in 2011.
Feature Presentation: Ashish Narsale/Rediff
