India’s government has greenlit a trial to test 2 billion polymer banknotes in ₹10 and ₹20 denominations, aiming to enhance durability and reduce costs, with circulation expected to start in the next financial year if successful.
India’s government has cleared the Reserve Bank of India’s plan to test 1 billion polymer notes each in the ₹10 and ₹20 denominations, a move that could eventually bring tougher, longer-lasting banknotes into circulation alongside the existing paper stock, according to a written reply by Finance Minister Nirmala Sitharaman in the Rajya Sabha and reporting by several Indian business outlets.
The approval follows a request from the RBI, backed by its Central Board, under Section 25 of the Reserve Bank of India Act, 1934. According to the parliamentary reply, the central bank is seeking to run field trials before deciding on regular issuance, with polymer notes intended to co-exist with paper substrate banknotes rather than replace them.
RBI Governor Sanjay Malhotra said earlier this month that the bank was still at the pilot stage and wanted the notes to be in circulation from the start of the next financial year, if the programme goes ahead as planned. He said the notes would be tested in Indian weather, infrastructure and everyday handling conditions, adding that lower-value currency tends to wear out faster because it changes hands more often.
The government has not set a launch date or cost estimate, with Sitharaman saying procurement is still at an early stage. Business Standard, The Times of India, The Indian Express and NDTV all reported that the trial is expected to cover 100 crore notes of each denomination, or 2 billion notes in total, and that the broader policy question is durability rather than replacement, with paper and polymer notes set to circulate together if the experiment succeeds. India Today reported that the longer lifespan of polymer notes could help reduce printing and disposal costs over time.
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