The Reserve Bank of India (RBI) and the Union government are moving ahead with plans to introduce polymer banknotes in ₹10 and ₹20 denominations. Field trials have been approved with the central bank targeting their circulation from the beginning of FY28, subject to successful testing and operational assessments, multiple news media reports suggested.
The government approved the RBI’s proposal to introduce one billion ₹10 polymer notes and one billion ₹20 polymer notes for field trials, The Hindu has quoted the finance ministry as stating in a written reply to the Rajya Sabha. The proposal, recommended by the RBI’s central board under Section 25 of the Reserve Bank of India Act, 1934, also provides for regular issuance of polymer notes in the two denominations after the successful completion of the trials.
RBI Governor Sanjay Malhotra has been quoted by Business Standard as saying that the central bank has initiated the tendering process to procure the polymer substrate and will test the new currency under Indian climatic, usage and infrastructure conditions before deciding on a wider rollout. “We are still at a pilot stage,” Malhotra said, adding the RBI is targeting the beginning of the next financial year for circulation if everything proceeds as planned.
The move is aimed at improving the durability and cost efficiency of currency, particularly for lower-denomination notes that undergo heavy circulation and wear and tear. Polymer banknotes typically last three to four times longer than conventional paper notes and have been used in several countries for more than three decades. They can also incorporate advanced security features, including transparent windows and enhanced anti-counterfeiting elements.
Malhotra said the initiative would also help expand India’s currency printing capacity as the economy’s cash requirements continue to grow. The notes will undergo multiple stages of testing, including security clearance, before a decision is taken on wider issuance.
The RBI’s procurement process is currently at an early stage, and the government has said the exact timeline for the introduction of the notes and the expenditure involved cannot yet be determined.
According to the RBI’s FY26 annual report, expenditure on security printing declined to ₹4,875.2 crore in 2025-26 from ₹6,372.8 crore a year earlier. Around 60 countries, including Australia, the United Kingdom and Vietnam, have fully or partially adopted polymer banknotes, the BS report stated.
Paper currency will not be banned, despite viral social media rumors claiming that all banknotes will soon be replaced with plastic. The government clarified that polymer notes will circulate alongside existing paper notes as legal tender, with the current pilot limited to ₹10 and ₹20 denominations.
Why plastic over paper
Traditional Indian banknotes, made from cotton-pulp paper, are vulnerable to wear, moisture, dirt, and frequent replacement. Polymer notes, made from BOPP, can last significantly longer, resist water and dirt, and incorporate advanced security features such as transparent windows and holograms. Their longer lifespan could reduce the substantial cost of replacing damaged paper notes.
Indian Printer and Publisher has previously written how fibrous polymer substrates for printing commonly have at least three levels of security to prevent counterfeiting and are also not easily if at all tearable. They have effectively replaced cotton-based paper with a security thread, in many countries. In addition, the proponents of plastic-based currency claim that these substrates can be recycled.
Earlier attempts
Reports suggested India has faced challenges with polymer currency before. A 2012 pilot in five cities was apparently shelved after ATMs and counting machines struggled with the thinner, smoother, and more slippery notes. The RBI had conducted market research in select towns, and that trials were held in Bhubaneshwar, Jaipur, Kochi, Mysuru and Shimla, to evaluate the climatic factors on the use of the new plastic currency, the reports stated.
There were also concerns about dependence on specialized global suppliers for the polymer material. The new field trials will test how the notes perform in India’s diverse climate and high-volume cash economy before any wider rollout is considered.
