The Reserve Bank of India aims to roll out long-lasting polymer banknotes starting next financial year, signalling a significant shift in India’s currency management and durability practices, with trial runs underway for ₹10 and ₹20 denominations.
Reserve Bank of India Governor Sanjay Malhotra said on Wednesday that the central bank is aiming to begin circulating long-lasting polymer banknotes at the start of the next financial year, marking a possible step towards a broader shift in how India prints and manages cash. Speaking after the monetary policy review, Malhotra said polymer notes have lasted for more than 30 years in some countries and would be particularly useful for lower denominations, which change hands more often.
The plan comes as the Indian government has already approved field trials for 2 billion polymer notes in ₹10 and ₹20 denominations, according to reports in July. Those notes are expected to be tested for durability and cost-effectiveness, with paper currency continuing to circulate during the trial period. The proposal has been described as exploratory rather than a full replacement of existing notes, and official reports have said no final decision has yet been taken on a nationwide rollout.
Malhotra also said the RBI’s next decision on interest rates and policy stance will depend on incoming data, adding that the bank’s main objective remains bringing headline inflation into line with its 4% medium-term target. He said flows under the Foreign Currency Non-Resident (Bank) scheme have been robust and that the RBI expects that momentum to continue until the limited-period programme closes. Asked whether the scheme might be ended early because the RBI bears the cost of the inflows, he said there was no such proposal at present.
On the currency market, Malhotra said further rupee strength could be possible if geopolitical tensions ease, while stressing that the RBI’s aim is to keep the exchange rate on an orderly path. That message suggests the central bank is in no hurry to force a sharper move in the currency, even as it prepares for a possible shift to more durable banknotes in the months ahead.
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