Tahir Qureshi
Tahir Qureshi is a senior sub-editor at India.com, whose primary duties are writing news related to different beats like National. World, Business, and viral. He also breaks stories and then follows t ... Read More
New Delhi: The appearance of Rs 10 and Rs 20 notes in the country may soon change. The government has approved field trials for polymer banknotes in these denominations. Under this initiative, 1 billion (100 crore) polymer—or plastic—notes each of the Rs 10 and Rs 20 denominations will be issued. Finance Minister Nirmala Sitharaman shared this information in a written reply in the Rajya Sabha on Tuesday. A decision regarding their future will be taken after evaluating their usage and durability.
However, this does not mean that the existing paper Rs 10 and Rs 20 notes will be immediately discontinued. According to the RBI’s plan, existing paper-based banknotes will continue to circulate alongside the polymer notes; this means that in the near future, people may see both paper and polymer versions of the same denomination in circulation.
This step is being taken specifically to enhance the durability and extend the lifespan of low-denomination notes. According to the RBI, notes of lower denominations like Rs 10 and Rs 20 see heavy usage. Consequently, they change hands frequently and tend to wear out quickly. Polymer notes represent an experimental step toward addressing this issue.
Yes, but they are not being issued for general circulation across the country yet. The government has first authorised the RBI to conduct field trials. A decision on whether to proceed with regular printing and large-scale issuance of polymer notes will be made based on the results of these trials. The RBI’s Central Board had submitted this proposal to the government under Section 25 of the Reserve Bank of India Act, 1934, and the government has approved it. Finance Minister Nirmala Sitharaman stated in a written reply in the Rajya Sabha on Tuesday that the government has approved the RBI’s proposal regarding polymer banknotes. According to the RBI, the plan is to issue polymer notes alongside the existing banknotes made from paper substrates. This essentially means that polymer notes will not immediately replace paper notes entirely; both types of currency can coexist.
The government has announced that 1 billion (100 crore) polymer notes each of the Rs 10 and Rs 20 denominations will be produced. This volume has been set for a field trial. It does not mean that 2 billion polymer notes will be immediately released into the market for regular circulation. First, these notes will be tested under real-world conditions. Subsequently, the RBI will assess the durability of the polymer notes, identify any issues regarding their maintenance and usage, and determine whether a large-scale rollout would be beneficial.
A field trial involves testing a new system or product under real-world conditions on a limited or controlled scale. The same process is being followed for polymer notes. The RBI will first put these notes into circulation to evaluate their utility for the general public, shopkeepers, banks, and cash-handling systems.
How long does the note last?
What is its condition after repeated folding?
How are they affected by heat and humidity?
Do machines face any issues in recognising them?
How do they perform in ATMs and cash processing machines?
Do people find them easy to identify and use?
How effective are the note’s security features?
What are the production and management costs?
A decision to issue polymer notes on a large scale can only be made after evaluating all these aspects.
The most significant change will be in the banknote’s material, or substrate. Currently, most banknotes in India are produced using a paper-based substrate. Polymer notes, however, utilise a special type of plastic-based material instead of paper. While polymer banknotes function just like ordinary paper notes in terms of appearance and usage, their base material differs. This can enhance the note’s strength and durability. RBI Governor Sanjay Malhotra has cited superior durability as one of the key reasons for the shift towards polymer notes. According to him, this is particularly important for low-denomination notes, as they experience high volumes of circulation and frequent handling.
The primary reason is the high frequency of their usage. Rs 10 and Rs 20 notes are constantly used by the general public for a wide range of daily purchases—from buying groceries, tea, and snacks to paying for local transport, making small payments, and various other transactions. The faster a note circulates among the public, the greater the likelihood of it tearing, getting soiled, or deteriorating. Therefore, extending the lifespan of low-denomination notes is a priority for the RBI. India is also taking into account the experiences of other countries regarding polymer notes; according to the RBI Governor, polymer notes have been in use in many countries for over 30 years.
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