The Central Government has approved the Reserve Bank of India’s (RBI) proposal to conduct field trials of polymer ₹10 and ₹20 banknotes, marking a significant step towards testing a more durable and secure form of currency in India.
The approval, announced by Minister of State for Finance Pankaj Chaudhary in a written reply in the Lok Sabha, allows the RBI to issue one billion polymer notes each of the ₹10 and ₹20 denominations for pilot circulation. However, the government has categorically clarified that there is no proposal to replace existing paper currency, with polymer notes set to circulate alongside conventional banknotes if the trials prove successful.
Officials said the exercise is intended to evaluate the notes’ durability, security features, public acceptance and performance under India’s diverse climatic conditions. They also reiterated that cash and digital payments are complementary payment systems, and the move should not be viewed as a shift away from India’s digital payments ecosystem.
Testing a More Durable Currency
According to the Finance Ministry, the RBI’s proposal was made under Section 25 of the RBI Act after receiving the recommendation of its Central Board.
The central bank believes polymer banknotes have a significantly longer lifespan than paper notes, citing international studies that show they are more resistant to moisture, dirt, folding and wear and tear. Polymer notes also allow for sophisticated anti-counterfeiting features such as transparent windows, specialised security threads and embedded patterns that are difficult to replicate.
If the field trials are successful, the RBI may proceed with regular issuance of polymer ₹10 and ₹20 notes while continuing to print paper currency.
Responding to concerns over whether the move could affect India’s rapidly expanding digital payment ecosystem, Minister Pankaj Chaudhary said it is too early to assess any such impact, adding that “banknotes and digital payment systems are complementary payment tools available to the public.”
The RBI’s annual report also shows that while expenditure on printing currency declined in FY26 due to lower printing requirements, the total value of currency in circulation continued to rise to ₹41.23 lakh crore, highlighting that cash remains an integral part of India’s economy despite the rapid adoption of UPI and other digital payment platforms.
Reviving a Decade-Old Proposal
India’s interest in polymer currency is not new. The RBI had first announced plans to introduce plastic banknotes in 2012, but the proposal was shelved because of technological and operational challenges. The idea has now been revived after Bharatiya Reserve Bank Note Mudran Pvt. Ltd. (BRBNMPL), the RBI’s currency-printing subsidiary, invited global manufacturers to supply specialised polymer substrate sheets embedded with advanced security features.
The initial procurement is intended specifically for field trials, with larger-scale production dependent on the outcome of the pilot. More than 60 countries, including Australia, Canada, the United Kingdom, Singapore, New Zealand and Romania, already use polymer banknotes because they last significantly longer than cotton-paper notes, reducing replacement costs while improving security against counterfeiting.
India’s renewed push reflects an effort to modernise its currency management system while ensuring that any long-term transition is backed by evidence from real-world testing rather than immediate nationwide implementation.
The Logical Indian’s Perspective
Modernising India’s currency infrastructure is a sensible step if it enhances security, reduces waste and lowers long-term costs without disrupting people’s everyday lives.
The government’s decision to begin with limited field trials, rather than a nationwide rollout, reflects a cautious and evidence-based approach that allows policymakers to assess the technology before making larger commitments.
Equally important is the assurance that paper currency will continue alongside polymer notes, ensuring financial inclusion for millions who still depend on cash while India simultaneously expands its digital payment ecosystem.
As India balances innovation with accessibility, public trust and transparency must remain at the heart of every monetary reform. Do you think polymer banknotes should gradually become more common in India if the trials prove successful, or should the country continue relying primarily on traditional paper currency?
The Centre has approved the RBI’s proposal to conduct field trials of 1 billion polymer notes each in ₹10 and ₹20 denominations. If successful, polymer notes may be introduced for regular circulation and are expected to last longer than paper currency.
— DD News (@DDNewslive) July 28, 2026
The government clarified… pic.twitter.com/9fxpGVF22I
