Mumbai, Aug 5: The Reserve Bank of India (RBI) plans to introduce polymer or plastic currency notes at the start of the next financial year, subject to successful field trials, Governor Sanjay Malhotra said today.
Pilot issuance of polymer currency in Rs 10 and Rs 20 denominations has already been approved by the central government.
The government has authorised the RBI to print one billion polymer Rs 10 notes and one billion polymer Rs 20 notes for the trial phase. The exercise is intended to generate operational data before the central bank takes a call on regular issuance.
The RBI plans to assess the notes under varied climatic and usage conditions before deciding on a wider adoption, with existing paper currency continuing to circulate alongside polymer notes during the transition.
Speaking on the issue, Malhotra said the central bank is targeting an early next financial year launch if the field trials deliver satisfactory results. The pilot will help evaluate the durability, usability and performance of polymer banknotes in Indian conditions before any nationwide rollout.
Polymer banknotes are expected to last significantly longer than conventional cotton-based paper notes, making them more resistant to wear, moisture and soiling.
They also allow the incorporation of advanced security features that improve resistance to counterfeiting.
The RBI has said the move is aimed at enhancing the longevity of frequently used low-denomination currency while strengthening the security of banknotes in circulation.
The central bank clarified that the introduction of polymer notes does not imply an immediate replacement of existing paper currency.
Both formats are expected to circulate simultaneously during the initial phase, with any broader migration depending on the outcome of the pilot programme.
India has explored polymer currency in the past through limited trials, but the latest initiative marks the most concrete step toward a commercial rollout. (BVI)
