India approves RBI trial of polymer currency notes

The India government has approved the Reserve Bank of India's (RBI) proposal to conduct field trials of polymer banknotes in the 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 under Indian conditions before any wider rollout is considered.

The government clarified that the move does not mean paper currency will be withdrawn. Polymer notes will circulate alongside existing paper banknotes, and there are no plans to replace the current currency system.

As part of the pilot, the RBI will issue one billion Rs10 notes and one billion Rs20 notes made from polymer. The trial is intended to evaluate their durability, security and overall suitability for use across the country.

According to the RBI, polymer banknotes last significantly longer than conventional paper notes, especially in countries where cash remains widely used. Lower-value notes are handled more frequently and tend to wear out quickly, leading to higher printing and replacement costs.

RBI believes polymer notes could reduce these costs over time while also cutting waste generated from the disposal of worn-out currency.

Another key advantage is improved security. Polymer banknotes can incorporate advanced anti-counterfeiting features, including transparent windows and specialised security elements, making them more difficult to forge.

The RBI will review the results of the field trials before deciding whether the use of polymer currency should be expanded.