Government Approves Polymer Banknotes for Field Trials:
The Government has approved the Reserve Bank of India (RBI) proposal under Section 25 of the Reserve Bank of India Act, 1934 to introduce one billion pieces each of Rs 10 and Rs 20 polymer banknotes for field trials.
- Polymer notes will be issued alongside existing paper-substrate banknotes rather than immediately replacing them.
- The notes will initially undergo field trials, after which successful trials may lead to their regular issuance in these denominations. Field trials will help assess their cost, durability, security, environmental impact and suitability for India’s climatic conditions.
- These are made from biaxially oriented polypropylene (BOPP), unlike traditional Indian currency made from cotton-pulp paper.
- Polymer Banknotes are more durable, water-resistant and tear-resistant, with features such as transparent windows and embedded security elements that make counterfeiting harder.
- Polymer notes generally last 2.5–4 times longer than paper notes.
- India reportedly spends nearly Rs 5,000 crore annually on replenishing and maintaining its banknote stock and destroys around 20–24 billion soiled notes each year under the RBI’s Clean Note Policy.
- Since lower denominations such as Rs 10 and Rs 20 deteriorate faster due to frequent circulation, polymer notes could reduce replacement frequency and lifecycle costs.
