Govt Clears RBI Pilot for ₹10 and ₹20 Polymer Banknotes

The Government of India has taken the first formal step towards the possible introduction of polymer banknotes after approving the Reserve Bank of India's proposal to conduct field trials of polymer-based ₹10 and ₹20 notes.

The Ministry of Finance has authorised the RBI to print one billion pieces (one hundred crore) each of the ₹10 and ₹20 polymer banknotes for pilot circulation across selected regions of the country.

The approval was confirmed by the Minister of State for Finance, Shri Pankaj Chaudhary, in a written reply to questions raised in the Lok Sabha.

According to the government, the RBI intends to introduce the polymer banknotes on a trial basis to evaluate their performance under India's diverse climatic and circulation conditions. The pilot project will assess factors such as durability, resistance to wear and tear, public acceptance, machine compatibility, and overall cost-effectiveness before any decision is taken on a wider rollout.

The RBI has maintained that polymer banknotes offer several advantages over conventional cotton-based paper currency. Drawing on international experience, the central bank noted that polymer notes generally have a significantly longer circulation life, are more resistant to moisture, dirt, and tearing, and incorporate advanced security features that make counterfeiting more difficult. Their longer lifespan could also reduce replacement costs in a country like India, where cash continues to play a significant role in everyday transactions.

However, the government has clarified that the initiative does not indicate the replacement of existing paper banknotes. Polymer notes are proposed only as an additional substrate and will circulate alongside conventional paper currency. There is currently no proposal to phase out paper-based banknotes in favour of polymer currency.

"There is no proposal under consideration to replace paper substrate-based banknotes with polymer substrate-based banknotes," Minister of State for Finance Shri Pankaj Chaudhary stated in his written reply to the Lok Sabha.

Responding to queries regarding digital payments, the RBI stated that it is premature to assess whether the introduction of polymer banknotes would have any impact on digital payment adoption. Such an evaluation can only be undertaken after the pilot notes enter circulation and sufficient operational data becomes available.

The central bank further emphasised that physical currency and digital payment systems are complementary rather than competing modes of payment and are expected to continue coexisting as part of India's evolving payment ecosystem.

The latest development follows an important procurement initiative announced earlier this month. On July 17, 2026, Bharatiya Reserve Bank Note Mudran Private Limited (BRBNMPL), one of India's banknote printing companies, issued a Global Expression of Interest (EOI) inviting manufacturers to supply opacified polymer substrate sheets incorporating advanced security features for the proposed polymer banknotes. The EOI marked a significant milestone in India's preparations for the pilot project and indicated that technical groundwork for the field trials is already underway.

If the pilot proves successful, India could join the growing list of countries that have adopted polymer banknotes to improve currency durability, security, and long-term cost efficiency while continuing to retain conventional paper currency in circulation.