RBI targets rollout of polymer ₹10, ₹20 notes at start of April 2027; check details

Plastic currency notes could begin entering circulation in India at the start of the next financial year, subject to the successful completion of field trials, Reserve Bank of India (RBI) Governor Sanjay Malhotra said on Wednesday.

Addressing the media after the Monetary Policy Committee (MPC) meeting, Malhotra said the central bank is moving ahead with plans to introduce polymer banknotes in the ₹10 and ₹20 denominations on a trial basis.

"We are targeting that they are in circulation, as per plan, in the beginning of next FY," the RBI Governor said.

The move follows the government's approval for the RBI to conduct field trials using polymer notes, reviving a proposal that was first announced over a decade ago but never progressed to implementation.

Why is the RBI introducing polymer notes?

The RBI believes polymer notes could significantly improve the durability of lower-denomination currency, which changes hands more frequently than higher-value notes.

Explaining the rationale, Malhotra said lower-value notes have a much shorter lifespan because they are used extensively in day-to-day transactions.

"Polymer notes enhance durability and life. They are relevant for lower denominations because of their higher velocity of circulation, and therefore their lifespan is lower," he said.

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Unlike conventional Indian banknotes, which are printed on cotton-based paper, polymer notes are produced using a durable plastic substrate that is more resistant to moisture, dirt and physical wear.

Because ₹10 and ₹20 notes are among the most widely used denominations, they deteriorate much faster and require frequent replacement. The RBI expects polymer notes to remain in circulation for considerably longer, reducing replacement costs over time.

Government approves field trials

Last month, the government approved the RBI's proposal to print one billion ₹10 notes and one billion ₹20 notes on polymer substrates for field trials.

The pilot will assess how the notes perform under Indian climatic conditions and heavy circulation before any decision is taken on wider adoption.

The initiative also gained momentum after Bharatiya Reserve Bank Note Mudran Private Limited (BRBNMPL), an RBI subsidiary, floated tenders for polymer substrates required to manufacture the trial notes.

The government has clarified that the approval is limited to field trials and there is currently no proposal to replace all existing paper currency with polymer banknotes.

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Longer life, lower replacement costs

According to the RBI, polymer notes have a higher upfront production cost than paper notes but are significantly more durable. Their longer lifespan reduces the need for frequent printing, transportation and destruction of worn-out notes, potentially lowering overall currency management costs.

Polymer banknotes are already in circulation in more than 60 countries, including Australia, the United Kingdom, Canada, New Zealand, Singapore, Malaysia, Thailand and Vietnam.

Australia became the first country to introduce polymer currency in 1988, and several central banks have since adopted the technology because of its durability, lower lifecycle costs and greater resistance to wear and tear.

For now, the RBI has made it clear that polymer notes will coexist with paper currency during the trial phase. If the field tests are successful, regular issuance of polymer ₹10 and ₹20 notes is expected to begin at the start of the next financial year, in line with the timeline outlined by Governor Malhotra.

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