Reserve Bank of India Governor Sanjay Malhotra said India may introduce polymer currency notes from the next financial year. However, the rollout depends on successful field trials.
During the Monetary Policy Committee meeting briefing, Malhotra explained RBI’s plan. He said the central bank aims to introduce polymer banknotes after completing trials.
Furthermore, RBI has proposed trial production of ₹10 and ₹20 polymer notes after receiving government approval. This move revives a plan announced more than a decade ago. However, authorities never implemented that earlier proposal.
Why RBI Wants Polymer Currency Notes
According to Malhotra, polymer notes offer higher durability than traditional paper currency. Therefore, these notes suit lower denomination currencies that change hands frequently.
He explained that ₹10 and ₹20 notes experience faster wear due to regular daily transactions. Consequently, polymer notes can increase lifespan and reduce frequent replacements.
Moreover, longer-lasting notes may reduce the need for repeated printing, transportation, and replacement. This could lower overall currency management costs over time.
Government Approves ₹10 and ₹20 Polymer Note Trials
Last month, the government approved RBI’s proposal for field testing. The plan includes one billion polymer notes each for ₹10 and ₹20 denominations.
If trials succeed, authorities may consider regular issuance. The proposal moved ahead after RBI subsidiary BRBNMPL issued a tender.
The tender aimed to arrange polymer substrate required for printing trial banknotes. However, the government clarified that current paper currency will not be replaced immediately.
Why Polymer Notes Are Being Considered Globally
Indian currency currently uses cotton-based paper for printing. In comparison, polymer notes use durable plastic substrates.
RBI cited international studies showing polymer notes last longer than regular paper notes. Although production costs remain higher initially, their extended life reduces future expenses.
Additionally, RBI stated that polymer notes fit low-value denominations because people use them more frequently than higher-value notes.
Countries Already Using Polymer Banknotes
More than 60 countries already use polymer banknotes worldwide. These include Australia, the United Kingdom, Canada, New Zealand, Singapore, Malaysia, Thailand, and Vietnam.
Australia became the first country to introduce polymer banknotes in 1988. Since then, several central banks adopted this technology.
These countries use polymer notes because they provide strength, longer life, and lower replacement costs. Furthermore, the International Monetary Fund noted their environmental benefits.
Paper Currency Will Continue Alongside Polymer Notes
The government clarified that polymer notes will operate alongside existing paper currency. The field trials aim to test performance under Indian conditions. Therefore, RBI will decide future expansion after evaluating trial results. If successful, ₹10 and ₹20 polymer notes may receive regular issuance.
According to Governor Malhotra’s timeline, the first polymer notes could enter circulation at the beginning of the next financial year.
