The Finance Ministry disclosed to Parliament that the government has sanctioned the Reserve Bank of India’s proposal to conduct field trials of polymer currency notes in Rs 10 and Rs 20 denominations. Minister of State for Finance Pankaj Chaudhary confirmed the approval in a written response to the Lok Sabha. The introduction of polymer banknotes is intended to coexist with paper currency and not replace it entirely.
The Reserve Bank will release one billion pieces each of Rs 10 and Rs 20 polymer currency notes for the field trials across the country. These trials aim to assess the performance of polymer notes in Indian conditions, with a potential wider implementation if successful. The RBI highlights the durability of polymer banknotes compared to traditional paper currency, emphasizing their longer lifespan and suitability for high-cash circulation economies.
Polymer banknotes offer advantages such as reduced wear and tear, leading to lower replacement costs and waste compared to paper notes. Additionally, they incorporate advanced security features like see-through windows and specialized security threads. The RBI clarified that any potential impact of polymer notes on digital payments can only be evaluated once they are in regular circulation. Both physical currency and digital payment systems are viewed as complementary modes of payment expected to coexist.
Minister Chaudhary reiterated that there are no current plans to replace paper-based banknotes with polymer-based ones, emphasizing the coexistence of different substrates for currency.
