Govt Approves RBI Proposal To Test Rs 10, Rs 20 Polymer Banknotes; Will Existing Notes Be Replaced?

The Reserve Bank of India (RBI) has received approval from the Centre to conduct field trials of polymer banknotes in Rs 10 and Rs 20 denominations. The move is aimed at assessing the suitability and durability of polymer-based currency notes before proceeding with wider issuance of polymer currency notes.

RBI’s Proposal For Polymer Notes

In a written reply to a question in Lok Sabha on July 27, 2026, Minister of State for Finance Pankaj Chaudhary said RBI, with the recommendation of its Central Board, had submitted a proposal to introduce one billion pieces each of Rs 10 and Rs 20 polymer banknotes for field trials. The proposal has been approved by the government.

The question was raised by Lok Sabha MPs Ramprit Mandal and Krishna Devi Shivshankar Patel, who sought details on the proposed introduction of polymer/plastic notes, asked for clarifications on the reasons behind the move, its impact on digital payments and whether the government planned to replace paper currency with polymer notes.

The RBI had submitted the proposal under Section 25 of the Reserve Bank of India Act, 1934. The proposal includes regular issuance of polymer banknotes in these denominations after successful completion of the field trials.

No Plan To Replace Paper Currency

However, the government has clarified that polymer notes will not replace existing paper currency. According to the RBI’s information shared in the reply, polymer banknotes are proposed to be issued alongside paper substrate-based banknotes, and there is no proposal to shift completely to polymer-based currency.

The RBI informed that international studies have shown polymer banknotes have a significantly higher lifespan compared with paper banknotes. The government also noted that the introduction of polymer notes is currently in a preliminary phase, and their impact on digital payments, if any, can only be assessed after regular issuance. “The life span of polymer banknotes is significantly higher than that of paper banknotes,” the government said in its reply.

On the impact of polymer notes on digital payments, the government said cash and digital payment systems will continue to serve as complementary payment tools for the public.

“Banknotes and digital payment systems are complementary payment tools available to the public,” the government said.

The RBI’s field trials will help assess the performance, circulation experience, and suitability of polymer banknotes before any decision on its wider issuance is taken