RBI Polymer Currency Plan: What The Rs 10 And Rs 20 Note Trial Means

The Centre has given the go-ahead to the Reserve Bank of India to conduct field trials of polymer notes. Union Minister of Finance Nirmala Sitharaman said in a written reply to Rajya Sabha on August 11, 2026 that the RBI has submitted a proposal under Section 25 of the RBI Act, 1934 in this regard. 

What Has The Centre Approved

The Centre has given an approval to RBI to conduct field trials of polymer notes. The plan covers one billion notes of Rs 10 and Rs 20 denomination each, taking the total volume to two billion notes.

Unlike conventional banknotes, polymer notes are made using a plastic-based material. They are designed to withstand handling over longer periods and are generally less vulnerable to moisture and physical wear and tear.

The trial will give the RBI an opportunity to assess their performance in actual circulation before deciding whether they should be issued on a wider basis.

Why RBI is Testing Polymer Notes

Currency notes of Rs 10 and Rs 20 denomination are widely used for small value payments. Frequent handling can leave such notes dirty, damaged or worn out in a relatively short span of time.

Polymer notes are usually more durable than paper notes and can remain in circulation for longer. This could also affect how often worn-out notes need to be replaced.

However, the Centre’s approval is limited to the proposed trial. It does not mean that paper currency will be phased out or that polymer notes will immediately become the standard form of currency.

When Will The New Notes Enter Circulation

No launch date has been announced yet. The RBI has indicated that procurement is still at an early stage. As a result, the central bank cannot provide a definite timeline for the start of circulation or a reliable estimate of the expenditure involved.

The one billion Rs 10 notes and one billion Rs 20 notes will have a combined face value of Rs 3,000 crore. This figure represents the value printed on the notes and does not indicate how much the pilot will cost.

Will Existing Paper Notes Be Withdrawn

No. The Centre has clarified that there is no proposal at present to replace paper banknotes with polymer notes. If the RBI decides to issue polymer notes regularly after the trial, they could circulate alongside paper notes. The field exercise will help the RBI examine their durability and performance before taking any further decision on wider circulation of such notes.

India has previously tested polymer currency. In 2012, the Centre approved a field trial of one billion Rs 10 polymer notes across five cities. The latest proposal covers both Rs 10 and Rs 20 denominations.

Which Countries Already Use Polymer Notes

India would not be the first country to use polymer currency. Australia was the first country to introduce polymer banknotes, issuing a commemorative Australian 10 dollar (AU$) note in 1988 before replacing its full banknote series with polymer notes between 1992 and 1996.

Many other countries now have polymer notes in circulation. These include Canada, the UK, New Zealand, Mexico, and Singapore. According to data from the Bank of England, more than 30 countries worldwide issue polymer banknotes. Barbados also moved to polymer banknotes in 2022.

New Zealand currently uses polymer notes for all five of its banknote denominations, from NZ$5 to NZ$100. The UK has polymer notes of £5, £10 and £20 notes in circulation, while Australia uses polymer across its AU$5, AU$10, AU$20, AU$50, and AU$100 denominations.