The Government of India has approved the Reserve Bank of India’s (RBI) proposal to conduct field trials of polymer notes in Rs10 and Rs20 denominations, the Finance Ministry informed Parliament on Monday.
Minister of State for Finance Pankaj Chaudhary confirmed the decision in a written reply in the Lok Sabha, saying the trial will help assess how polymer notes perform in Indian conditions before any wider rollout is considered.
The government clarified that the move does not mean that the paper currency will be withdrawn. The polymer banknotes will circulate alongside the existing paper banknotes and there are no plans to replace the current currency system.
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As part of the pilot, RBI will issue one billion Rs 10 notes and one billion Rs 20 notes made of polymer. The trial aims to assess their durability, safety and general suitability for use across the country.
According to the RBI, polymer notes last significantly longer than conventional notes, especially in countries where cash remains widely used. Lower value notes are handled more often and tend to wear out quickly, leading to higher printing and replacement costs.
The RBI believes that polymer notes can reduce these costs over time, while also reducing the waste generated by disposing of spent currency.
Another major advantage is improved security. Polymer banknotes can include advanced anti-counterfeiting features, including transparent windows and specialized security features, making them harder to counterfeit.
The RBI will consider the results of the field trials before deciding whether the use of the polymer currency should be expanded.
