India approves RBI trials of ₹10 and ₹20 polymer banknotes

India is set to begin trials for polymer banknotes as the government has approved the Reserve Bank of India’s (RBI) proposal to introduce one billion pieces each of ₹10 and ₹20 polymer currency notes. The notes will initially be tested through field trials, and a wider rollout will depend on the outcome of these assessments.The approval was confirmed by Minister of State for Finance Pankaj Chaudhary in a written response to questions raised in the Lok Sabha. The move marks a significant step towards evaluating whether polymer-based currency can be adopted on a larger scale in India.The RBI’s primary reason for considering polymer notes is their higher durability compared with traditional paper currency. The central bank has cited international studies suggesting that polymer banknotes generally have a longer lifespan, making them potentially more cost-effective for countries where currency notes are used extensively. RBI Plans To Introduce Polymer Currency Notes As Cash Circulation Tops ₹42 Trillion Despite Digital Payments GrowthHowever, the initial phase will focus on testing how polymer notes perform in Indian conditions, including factors such as climate, handling patterns and circulation challenges. The RBI will assess the results before taking any decision on expanding their use.The introduction of polymer currency is also being viewed in the context of India’s rapidly growing digital payment ecosystem. However, the RBI has clarified that it is too early to determine whether polymer notes will have any impact on digital transactions. The central bank said such an assessment can only be made after the notes enter regular circulation.The RBI has also emphasised that physical currency and digital payment systems serve different purposes and can continue to operate together. The introduction of polymer notes is not intended to replace digital payments or reduce the use of existing currency.RBI's Forex Swap Facility Attracts USD 20.72 Billion Inflows Since June; FCNR(B) Deposits Lead Importantly, the government has clarified that polymer banknotes will be introduced alongside existing paper-based currency. There is currently no proposal to completely phase out paper notes in favour of polymer-based alternatives.If successful, the trials could pave the way for wider adoption of polymer currency in India, potentially improving the durability and efficiency of cash management while maintaining the coexistence of cash and digital payment systems.

The Indian government has approved the Reserve Bank of India's (RBI) proposal to introduce RBI polymer notes in the ₹10 and ₹20 denominations for field trials, reviving a plan that was first announced more than a decade ago. At the same time, the Centre has made it clear that there is no proposal to replace existing paper-based Indian currency with RBI plastic notes.Also Read: Govt approves RBI's trials of ₹10, ₹20 polymer notesTwo billion pieces of ₹10 and ₹20 RBI plastic notesThe decision comes weeks after Bharatiya Reserve Bank Note Mudran Private Limited (BRBNMPL), an RBI subsidiary, floated a tender indicating that the central bank was preparing to move ahead with a fresh trial of RBI polymer notes, around 14 years after a similar proposal was announced but never materialised.Also Read: RBI steps ahead on plan for plastic rupee notesReplying to a question in the Lok Sabha on Monday, Minister of State for Finance Pankaj Chaudhary said the RBI, on the recommendation of its Central Board, had proposed introducing one billion pieces each of ₹10 and ₹20 RBI polymer notes for field trials. Regular issuance would follow if the trials are successful. He said the government has approved the proposal.According to the minister, the RBI has informed the government that international studies show RBI polymer notes have a much longer lifespan than conventional paper notes, making them significantly more durable.Will Indian plastic notes affect digital payments?On whether RBI plastic notes could affect digital payments, Chaudhary said the proposal is still at a preliminary stage and any impact can only be assessed after regular issuance begins. He added that physical banknotes and digital payment systems complement each other and both remain available to the public.The government also clarified that RBI polymer notes will circulate alongside existing paper-substrate Indian currency. It said there is no proposal to replace paper banknotes entirely with polymer-based notes.Why RBI plastic notes are back on the agendaThe renewed push follows a recent Expression of Interest (EOI) issued by BRBNMPL, which earlier in July invited competitive bids from manufacturers and suppliers of opacified polymer substrate with security features suitable for printing banknotes.The RBI subsidiary said the requirement mentioned in the EOI was only for the immediate need. It added that if the field trials of RBI polymer notes are successful, it intends to procure larger quantities of polymer substrate across different denominations through future Requests for Proposal (RFPs) or subsequent tenders.What govt said about plastic currency notes?The latest move marks a revival of an idea earlier announced in 2012. According to a Press Information Bureau (PIB) release dated December 13, 2012, the RBI, in consultation with the Government of India, had considered various options, including printing banknotes on polymer substrate. At that time, a decision had been taken to introduce one billion pieces of ₹10 RBI polymer notes on a field trial basis in five cities.The PIB release had also clarified that the primary objective of introducing polymer or plastic notes was to increase the life of banknotes and not to combat counterfeiting.Even so, India, one of the world's five largest economies, is still evaluating RBI plastic notes nearly three decades after Australia introduced a complete series of polymer banknotes. Today, around 60 countries use polymer currency in some form.What are polymer notes and how are they different from Indian currency today?RBI polymer notes are printed on a non-fibrous and non-porous polymer substrate rather than conventional banknote paper.Current Indian currency is printed on paper made entirely from long cotton fibres obtained from cotton comber and linter. This means there is no direct link between paper-based banknotes and the cutting of trees.132675303The biggest reason for introducing RBI polymer notes is their longer lifespan, particularly for lower-denomination notes that change hands more frequently and wear out much faster.While a longer lifespan means fewer replacements, lower printing costs and reduced waste, it may also help curb counterfeit notes.Which countries use plastic notes?Countries including Australia, the United Kingdom and Canada already use polymer banknotes made from durable plastic films. These notes last much longer than conventional paper banknotes and are more resistant to wear and tear, helping reduce replacement costs over time.Australia became the first country to issue polymer banknotes in 1988. Today, more than 60 countries use plastic currency. Among developed economies, the UK, Canada and New Zealand have adopted polymer notes. Closer to India, Thailand, Vietnam, Malaysia and Singapore also use plastic currency, although not necessarily for every denomination.The Bank of Canada began shifting to polymer banknotes in 2011 after studying the environmental impact of producing paper and plastic banknotes.132675322Why RBI plastic notes could reduce costs over timeThe biggest advantage of RBI polymer notes is durability. Depending on the denomination, polymer notes can last between two and six times longer than paper banknotes. Lower-denomination notes generally have a shorter life because they circulate more frequently.A longer lifespan means fewer RBI polymer notes need to be printed over a given period. Although each polymer note costs more to manufacture than a paper note, fewer notes have to be produced, transported, processed and eventually destroyed. Over time, this lowers the overall cost of currency management while also reducing the environmental footprint.The RBI's own expenditure on printing currency fell nearly 24% to ₹4,875 crore in FY26 because of lower printing requirements. At the same time, demand for Indian currency remains robust. According to the RBI's annual report, the value of currency in circulation rose 12% year-on-year to ₹41.23 lakh crore at the end of March 2026. The ₹500 denomination continues to dominate circulation, accounting for 86% of the total value of notes in circulation.Studies by the Reserve Bank of Australia have found that although polymer banknotes are more expensive to produce because polymer substrate costs more than paper, their longer lifespan cuts replacement and processing expenses, resulting in substantial savings over time.What the IMF says about RBI polymer notes and plastic currencyIn a June 2016 article, the International Monetary Fund (IMF) said countries concerned about the environmental impact of their currency should consider switching to polymer notes.The IMF said: "Paper quickly became the currency of choice around the world and remained so for centuries. But with recent technological developments, plastic film notes offer additional security features along with longevity and energy efficiency."It said a life-cycle assessment examined every stage involved in producing both paper and polymer banknotes, including primary energy demand and global warming potential, from growing cotton for banknote paper or producing raw materials for polymer notes to the destruction and disposal of worn-out currency.According to the IMF, polymer outperformed paper across all categories. It said polymer banknotes reduce global warming potential by 32% and primary energy demand by 30% compared with paper notes. It also found that polymer notes last more than twice as long as paper banknotes, while higher denominations, which are handled less often, remain in circulation for even longer.The IMF added that because fewer RBI polymer notes would need to be produced and distributed over the life of a currency series, the overall environmental impact is lower. Polymer banknotes are also lighter than paper notes, making transportation and distribution more efficient.At the end of their life, paper banknotes are generally shredded and sent to landfill. Polymer notes, however, are shredded, converted into pellets and recycled into everyday plastic products such as lawn furniture.