In a significant step toward modernising India's currency ecosystem, the Central Government has authorised the Reserve Bank of India (RBI) to print 2 billion plastic notes for extensive field trials. The pilot project will initially cover Rs 10 and Rs 20 denominations, with one billion notes of each denomination being introduced to evaluate their durability, security, and performance under Indian circulation conditions. 

Key Higlights

• The centre has permited RBI to print 2 billion plastic notes for field trials covering Rs 10 and Rs 20 denominations
• India launches first large-scale polymer banknote trial after decades of planning and currency modernization efforts.

Minister of State for Finance Pankaj Chaudhary told the Lok Sabha that one billion pieces each of Rs 10 and Rs 20 notes, which are hard to find in circulation, will be printed for field trials and for regular issue after the trials are completed. He also ruled out any move to replace paper currency with polymer substrate banknotes, clarifying that both will co-exist

A Two-Decade-Long Discussion Finally Moves Forward

RBI has just floated a tender to source material for the plastic notes — something that has been under discussion for nearly two decades — and was cleared along with an expansion of currency printing infrastructure, which was facing capacity constraints. Officials have indicated it could take a few months before the new notes are launched, as the government and RBI want to ensure that safety is not compromised and there is no link with the material supplied to countries such as China and Pakistan.

Also Read: RBI Keeps Repo Rate at 5.25%, Predicts India GDP Growth at 6.9%

Push to Promote Coins in Rs 10 and Rs 20 Denominations

In recent years, Reserve Bank of India has sought to push coins in the Rs 10 and Rs 20 denominations. Together, they accounted for nearly a quarter of banknotes in circulation at the end of the last financial year, while in terms of value, the combined share was just 1.4%, according to RBI data.

"RBI has informed that as per international studies, the life span of polymer banknotes is significantly higher than that of paper banknotes. The introduction of polymer banknotes is currently in a preliminary phase," Chaudhary told Parliament.