- Central government approved RBI's proposal to introduce plastic banknotes for trials
- One billion Rs 10 and Rs 20 polymer notes will be printed and issued in circulation
- Polymer notes aim to test durability and resilience in India's diverse climate
The central government has approved a Reserve Bank of India (RBI) proposal to introduce plastic banknotes for field trials, Union Finance Minister Nirmala Sitharaman has confirmed. Under the pilot scheme, one billion pieces each of Rs 10 and Rs 20 polymer notes will be printed and issued into circulation.
Responding to a query in the Rajya Sabha, the Finance Minister stated that the proposal was submitted by the central board of the RBI under Section 25 of the Reserve Bank of India Act, 1934. The initiative seeks to test the performance, durability, and resilience of polymer currency under India's diverse climatic conditions.
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"The proposal has been approved by the Government. As per the RBI, these polymer banknotes are proposed to be issued along with paper substrate-based banknotes," Sitharaman said in her written response.
The finance minister stopped short of setting a launch date, saying the process of procuring the plastic notes has only recently begun.
“RBI has informed that the procurement process is presently at an initial stage. Therefore, at this point of time, it would not be possible to practically determine the exact timeframe for introduction of polymer banknotes or the expenditure likely to be incurred thereon,” Sitharaman told Rajya Sabha.
Earlier, RBI Governor Sanjay Malhotra noted that lower-denomination notes suffer from a high frequency of circulation, leading to fast wear and tear. Polymer substrate currency notes, which are widely used across approximately 60 countries including the UK, Australia, and Canada, typically boast a much greater lifespan than standard cotton-paper notes.
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They are highly resistant to moisture, dirt, and tearing, while incorporating enhanced security features such as micro-optic holograms and see-through windows to combat counterfeiting.
“We are still at a pilot [stage]. We will test, check as to how they [the polymer currency notes] perform in the Indian condition, climate and other infrastructure we have put in place. And thereafter we will see if we need to further scale it up as it is or with changes,” Malhotra had said on Aug. 5.
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