New Delhi: The Finance Ministry informed Parliament on Monday that the government has approved the Reserve Bank of India’s (RBI) proposal to conduct field trials of polymer currency notes in the Rs 10 and Rs 20 denominations.
The approval was confirmed by Minister of State for Finance Pankaj Chaudhary in a written reply to a question in the Lok Sabha.
The government, however, clarified that the move does not signal the end of paper currency. Polymer banknotes are proposed to circulate alongside existing paper notes, and there is no proposal to phase out paper-based banknotes in favour of polymer currency.
The Reserve Bank will issue billion pieces each of Rs 10 and Rs 20 polymer currency notes as part of the field trials to be carried out in the country.
The RBI has proposed introducing the polymer notes on a trial basis to evaluate their performance under Indian conditions. A wider rollout will be considered only if the field trials are successful, according to the government’s response.
The central bank has argued that polymer banknotes are more durable than conventional paper currency. Citing international experience, the RBI said polymer notes have a longer lifespan, making them suitable for economies with high cash circulation.
Lower currency denominations wear out quickly and require frequent reprinting and destruction; plastic notes reduce waste and long-term replacement costs. Polymer substrates allow for advanced anti-counterfeiting features like transparent see-through windows and specialized security threads.
The RBI also said it is too early to assess whether polymer notes will have any impact on digital payments. Any such assessment can be made only after the notes are introduced into regular circulation, it told the government.
According to the RBI, physical currency and digital payment systems are complementary modes of payment and are expected to continue coexisting.
“There is no proposal under consideration to replace paper substrate-based banknotes with polymer substrate-based banknotes,” Chaudhary said in a written reply in the Lok Sabha.
(IANS)
