New Delhi, The Reserve Bank of India (RBI) is preparing to introduce banknotes made of polymer, or plastic, into circulation in the country. RBI Governor Sanjay Malhotra stated that field trials of these notes are currently underway, and a decision on their mass issuance will be made based on the results of the trials. The central bank plans to introduce polymer notes into the market by the financial year 2027-28.

Notes being tested in Indian conditions

At a press conference held after the monetary policy announcement, the RBI Governor stated that a pilot project for polymer notes is being conducted to test their quality and durability under various conditions. Before issuing them on a large scale, it will be ensured that these notes are effective in accordance with the country's climate, usage patterns, and the needs of the banking system.

He stated that the data and experiences from the field trials will be analyzed in detail. Only after this will a final decision be made on introducing polymer notes to the general public.

Testing begins with 10 and 20 rupee notes

Earlier, the Central Government informed Parliament that the RBI's proposal has been approved, under which polymer notes in 10 and 20 rupee denominations will be tested. Under this pilot project, approximately 100 crore notes of each denomination will be issued to assess their strength, lifespan, and usability in Indian conditions.

Claimed as more durable than paper notes

The RBI believes that polymer notes last longer than ordinary paper notes. Polymer notes could prove to be a better option, especially for smaller denomination notes, which are used the most and tend to wear out quickly.

This is also expected to reduce the cost of reprinting notes and replacing worn out notes.

This will help curb counterfeit currency

Polymer notes will use modern security technologies. They may include transparent windows and other security features, making it easier to identify genuine and counterfeit notes. This is likely to help reduce the threat of counterfeit currency.

Paper notes will continue to be issued

The government has clarified that even after the introduction of polymer notes, there are no plans to completely phase out existing paper currency. The new polymer notes will continue to circulate alongside the old notes.

According to the RBI, these notes will be evaluated taking into account the climate, usage habits, and operational needs of different parts of the country. A decision on their mass issuance will be made only after field trials and a review of all technical aspects are completed.