According to the Minister of State for Finance, Pankaja Choudhary, during a speech in the Lok Sabha, India may soon begin issuing new polymer banknotes of 10 and 20 rupees.
According to the Minister of State for Finance, Pankaja Choudhary, during a speech in the Lok Sabha, India may soon begin issuing new polymer banknotes of 10 and 20 rupees.
This step was taken following a recommendation from the ministry's central council. Subsequently, the Reserve Bank of India (RBI) proposed to the government field trials for issuing polymer banknotes in these denominations, and after successful completion of the trials—regular issuance.
It was emphasized that the new polymer notes will be issued parallel to paper ones, and there is no intention to replace paper currency with polymer-based banknotes. This is the first instance where these specific denominations were indicated as targets for testing.
According to Indian media reports, the RBI's subsidiary company, Bharatiya Reserve Bank Note Mudran Private Limited (BRBNMPL), conducted a global tender for 3.4 crore polymer sheets for printing banknotes of the two denominations. The tender announcement stated that this volume was an 'immediate requirement,' and if the field trials are successful, larger batches of substrate for various denominations are planned to be procured.
The last major change in the banknote system occurred in 2016 when 500 and 1000 rupee notes were withdrawn from circulation. At that time, Prime Minister Narendra Modi announced that these notes would cease to be legal tender as part of the fight against 'black money,' after which new 500 and 2000 rupee notes were issued.
Despite this move receiving approval from business leaders and commentators, immediately after the announcement, Indian stocks fell by six percent in early trading before slightly recovering, and by lunchtime, they were approximately three percent lower than at the start of trading.
Finance Minister Pankaj Chaudhary informed Parliament on Monday that the government has approved the Reserve Bank of India (RBI) to issue one billion units each of polymer banknotes in denominations of 10 and 20 rupees for field trials.
Following the successful completion of these trials, the RBI will begin the regular issuance of polymer banknotes in the specified two denominations. Chaudhary clarified in a written response to a question in the Lok Sabha that the initial proposal from the RBI, based on Section 25 of the Reserve Bank of India Act of 1934, was approved by the government.
The Minister emphasized that the new polymer notes will be issued parallel to paper currency, and there are no plans to replace paper currency with polymer.
Previously, in May, Business Standard reported that the RBI was considering printing polymer banknotes to increase the lifespan of the notes and meet growing demand in recent years. In June, RBI Governor Sanjay Malhotra confirmed that the proposal for polymer banknotes is under consideration, and the central bank is evaluating all pros and cons.
According to the RBI's annual report for the fiscal year 2025, expenditure on secure printing of paper money in the 2024-25 fiscal year amounted to 6,372.8 crore rupees, which is higher than 5,101.4 crore rupees in the previous fiscal year, mainly due to an increased order for banknote printing.
Chaudhary noted that according to international studies, the lifespan of polymer banknotes significantly exceeds that of paper ones. He added that the introduction of polymer notes is in the preliminary stage, and the impact on digital payments can only be assessed after their regular circulation begins. He also recalled that banknotes and digital payment systems are complementary tools for the public.
India first attempted to introduce polymer banknotes in 2012 to extend their lifespan, but the project was suspended due to technological issues at that time. Currently, about 60 countries worldwide have implemented polymer banknotes into circulation. Australia was the first to introduce a polymer banknote in 1988, starting with a ten-dollar note, followed by Singapore, Indonesia, Thailand, and Malaysia. Among European countries, Romania was the first, introducing a polymer banknote in 1999, and Canada introduced similar notes in 2011.
