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NEW DELHI: The Central government has approved the introduction of one billion polymer banknotes each in the ₹10 and ₹20 denominations for field trials.
Finance Minister Nirmala Sitharaman informed Parliament of the decision in a written reply to the Rajya Sabha on August 11, 2026.
The Reserve Bank of India (RBI), acting on the recommendation of its Central Board, had submitted the proposal to the government under Section 25 of the Reserve Bank of India Act, 1934.
The proposal covers both the field trials and the subsequent regular issuance of polymer notes in these two denominations if the trials prove successful.
Key Details of the Approval
According to the Finance Minister, the government has cleared the proposal. The RBI has indicated that the polymer banknotes will be issued alongside the existing paper substrate-based notes rather than replacing them.
This parallel circulation approach will allow the central bank to evaluate the performance of polymer currency in real-world conditions.
The procurement process for the polymer substrate is currently at an initial stage. As a result, the government has stated that it is not yet possible to determine a precise timeframe for the introduction of the notes or to estimate the expenditure that will be incurred.
Why Polymer Notes?
Polymer banknotes are made from a thin, flexible plastic film instead of the traditional cotton-based paper.
They are generally considered more durable, more resistant to dirt and moisture, and harder to counterfeit than paper notes. Several countries, including Australia, the United Kingdom and Singapore, already use polymer currency for part or all of their note series.
India has previously conducted limited experiments with polymer notes, but a field trial of this scale has not been undertaken until now.
Next Steps
Once the procurement process advances, the RBI will arrange for the printing and distribution of the one billion pieces each of ₹10 and ₹20 polymer notes for field testing. Only after the successful completion of these trials will the central bank move towards regular issuance of polymer notes in the two denominations.
The decision marks an important step in the modernisation of India’s currency system, focusing initially on the two lower-value denominations that see the highest circulation and wear-and-tear.
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