RBI Revives Polymer Banknote Plan, Pilot Likely for Rs 10 and Rs 20 Notes

The Reserve Bank of India is once again examining a long-pending proposal to introduce polymer banknotes, a move first floated more than a decade ago. The push comes as currency printing costs rise and billions of soiled paper notes are pulled out of circulation every year. The matter was discussed at the central bank's last two board meetings, held in Patna and Mumbai, and a pilot is expected in the near future.

Polymer banknotes are printed on a thin, flexible plastic substrate rather than the cotton-based paper used for current Indian rupees. Despite the 'plastic' label, the notes are not rigid like a credit card — they remain lightweight, foldable and easy to handle. The lower-denomination notes that wear out fastest in daily use, especially Rs 10 and Rs 20, are likely to be tested first.

The principal advantage of polymer is durability. The notes resist dirt, moisture and tearing far better than paper, meaning a single note stays in circulation much longer before it has to be replaced. They can also carry advanced anti-counterfeiting features such as see-through windows, micro-optic holograms and specialised inks, making forgery harder.

More than 30 countries — including Australia, the UK, Canada, New Zealand and Singapore — have already switched some or all of their currency to polymer. India had tested a small batch of polymer Rs 10 notes around 2014, but a wider roll-out was not pursued at the time. If the new pilot succeeds, the RBI could substantially reduce its long-term currency management cost, although the upfront printing cost of polymer notes is higher than paper.