RBI Targets Polymer Currency Notes by Next Financial Year
The Reserve Bank of India (RBI) is moving ahead with plans to introduce polymer currency notes in India, with circulation targeted for the beginning of the next financial year, RBI Governor Sanjay Malhotra said on Wednesday.
Speaking at a post-Monetary Policy Committee (MPC) media briefing, Malhotra said polymer banknotes offer greater durability and a longer service life than conventional paper currency, making them particularly relevant for lower-denomination notes that experience high circulation and frequent handling.
“The polymer currency notes have enhanced durability and life. The polymer currency is relevant for high-velocity lower-denomination notes,” Malhotra said, adding that polymer notes have been used in several countries for more than three decades.
The RBI plans to assess the performance of polymer notes under Indian climatic and operating conditions before deciding on wider adoption. The trials will help determine whether the technology can be scaled up in its current form or requires modifications suited to the Indian environment.
The development follows the Finance Ministry’s recent confirmation to Parliament that the government has approved the RBI’s proposal to conduct field trials of polymer banknotes in ₹10 and ₹20 denominations. Under the pilot programme, the RBI plans to issue one billion pieces each of the two denominations to evaluate their durability, performance and suitability for circulation in India.
For the polymer industry, the proposed trials represent a potential new high-volume application for polymer-based materials in the currency sector. Polymer banknotes can also support advanced security features, including transparent windows and other anti-counterfeiting technologies.
However, the government has clarified that there is currently no proposal to replace paper currency completely. If polymer notes are adopted, they would initially circulate alongside existing paper banknotes.
The RBI’s decision on wider adoption will depend on the results of the field trials and an operational assessment covering different climatic conditions and usage patterns across the country.