The Reserve Bank of India (RBI) is targeting the introduction of polymer currency notes in the ₹10 and ₹20 denominations at the beginning of the next financial year, subject to the successful completion of ongoing field trials and operational assessments, governor Sanjay Malhotra said.
Speaking to reporters after the monetary policy committee (MPC) meeting, Mr Malhotra said pilot testing of polymer banknotes is under way and the RBI will evaluate their performance before taking a final decision on a wider rollout.
"There is still a pilot going on for polymer notes. We will test the currency before bringing it to the market," the governor said.
He added that, if everything proceeds according to plan, the central bank expects the polymer notes to enter circulation at the beginning of FY27-28.
According to Mr Malhotra, polymer banknotes have demonstrated significantly longer lifespans in several countries, with some jurisdictions reporting their use for more than 30 years. He said the enhanced durability makes them particularly suitable for lower-denomination notes, which experience high circulation and frequent handling.
The remarks come days after the Union ministry of finance informed Parliament that the government has approved the RBI's proposal to conduct field trials of polymer currency notes in the ₹10 and ₹20 denominations.
As part of the pilot programme, RBI plans to issue 1bn (billion) polymer notes each in the ₹10 and ₹20 denominations to assess their durability, operational performance and suitability under Indian conditions.
The central bank has maintained that polymer banknotes last significantly longer than conventional paper currency, reducing replacement costs, particularly for lower-denomination notes that are subject to greater wear and tear because of their high circulation.
Polymer notes also offer improved security features compared with paper currency, including transparent windows and enhanced anti-counterfeiting features that make them more difficult to forge.
The government has clarified that there is currently no proposal to replace paper currency entirely. Instead, polymer banknotes, if introduced, will circulate alongside existing paper notes.
RBI has said any decision on wider adoption will depend on the outcome of the field trials and a comprehensive assessment of the notes' performance under India's diverse climatic conditions and usage patterns before they are introduced on a larger scale.
It may be recalled that RBI has been considering the introduction of polymer currency notes for more than a decade. In 2013, it introduced ₹10 polymer notes on a pilot basis in select cities, including Mysore and Cochin.
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